Andrew Dismore: I congratulate the hon. Member for Sevenoaks (Mr. Fallon) on having got so far with his Bill so early in the parliamentary year; he has done a magnificent job. Although I have a few things to say, I assure him that my objective is not to prevent the Bill achieving its Third Reading, although I cannot speak for other hon. Members.
	I want to highlight one or two gaps in the Bill. I have read the report of the Committee proceedings, where the original Bill was ditched and a new Bill was introduced with, I assume, the backing of the Government, which resulted in the replacement of the original clause 1. Beyond that, the Bill did not receive a great deal of scrutiny in Committee, which is regrettable because it has a fair wind behind it and has attracted a consensus on its objective. In such cases, people do not want to get bogged down in the detail, and the net result is that things are left out or not put right.
	New clause 1 and amendment No. 11 address insulation, which is one of the most important issues relating to energy but which is missing from the Bill. New clause 1 would add an additional permissive power to allow local authorities to impose additional reasonable requirements on insulation in both domestic and commercial developments, which could go beyond existing building regulations.
	As one might expect, amendment No. 11 refers to
	"national policies relating to insulation".
	Why should we focus on insulation? In 1998, my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) was the Minister with responsibility for construction, and he instituted a comprehensive review of energy-efficient provisions in the building regulations and set out proposed amendments to part L of the regulations, to which new clause 1 and amendment
	No. 11 relate. The purposes of the amendments to part L were significantly to raise performance standards for insulation in building fabric after two years, to improve supply after six months and to tie those standards more firmly to, for example, the efficiency of boilers.
	When my right hon. Friend announced those improvements, the objective was to cut heating bills for homes by one quarter, which would make a substantial contribution to Britain's aim of reducing carbon dioxide emissions. If we are serious about meeting our Kyoto targets, cutting energy consumption and examining different forms of energy supply, we should consider how much energy we are using in the first place. If we want to introduce a green Bill such as this, it is an omission to consider only half the equation—namely, where the energy comes from rather than how much of it we are using.
	The new part L of the building regulations set most builders and building service engineers a challenge. The Government worked closely with the industry, and the view was that new part L would yield substantial benefits for occupiers of dwellings and other buildings through lower heating bills. The saving was up to 25 per cent. in the case of dwellings, and it also resulted in lower air-conditioning bills—I do not suppose that many houses have air-conditioning, but it certainly improves comfort and productivity in other settings. It has been estimated that the measures in part L would contribute 1.4 million tonnes of carbon in 2010 of the overall 23 per cent. cut in the UK's greenhouse gas emissions as set out in the climate change programme, as it then was. The guidance in the new improved documents significantly raised the performance standards for building insulation, which is the subject of new clause 1. It is also important to recognise that part L of the regulations addresses summer performance as well as insulation against winter cold.
	The provisions were not restricted to new buildings. Around half the carbon benefits mentioned would come from the application of the new requirements for work in existing buildings. For dwellings, for example, the new rules applied whenever windows, glazed doors, boilers and hot water vessels were replaced. For buildings other than dwellings, the same provisions would apply for windows and systems such as heating, ventilation and air-conditioning, but that was qualified in that reasonable provision depended on the circumstances of the particular case. The sympathetic treatment of historic buildings was also considered to be necessary.
	Part L was important, particularly after it was changed again in April 2006, which resulted in even higher standards than those imposed in 2002. When building work is carried out on buildings with a floor area greater than 1,000 sq m, consequential improvements must also be made to the whole building, if they are practical and cost-effective, which included improvements to increase energy efficiency.

Nigel Evans: Would it not be tidier not to include the provision in this Bill and to introduce a requirement to consider building regulations to ensure that they meet the highest standards, which all hon. Members want these days?

Andrew Dismore: The hon. Gentleman has made an important point. We may have to wait for further amendments to the building regulations, which have been significantly improved as time has gone by.
	The Bill introduces an important concept, which is to permit local authorities to go beyond the existing national guidance and regulations in the context of, for example, local energy supply. That enables local authorities, which are often more flexible than central Government, to be one step ahead of central Government in a major, nationwide reform. My concern is that a similar provision should be introduced on the insulation of buildings.

Stephen Pound: I thank my hon. Friend for the positive way in which he is approaching this excellent Bill. New clause 1 would introduce a requirement to exceed building regulations—a Merton plus, plus model. Given the work done by experts such as McBride and Healey, the provision would always exceed the building regulations, regardless of what they are.

Andrew Dismore: That is my objective. Clause 1(1) allows local authorities to, for example, develop policies for their area that require compliance with energy efficiency standards that exceed the energy requirements of building regulations. I am not introducing a new concept in the context of this particular Bill, because clause 1 addresses energy from renewable sources, low-carbon energy and energy requirements in general. I want to square the circle by saying that we should consider not only where the energy comes from—progress on energy requirements is part of what I am trying to achieve—but the consumption of energy, which is where insulation becomes relevant.
	In my view, the starting point on energy policy must be the reduction of consumption in the first place. The subsequent question is where the energy comes from, and further subordinate questions flow from that. The starting point is getting energy consumption down in the first place before we consider supply. It is important to recognise, as the Bill rightly does, that local authorities can sometimes be ahead of the game. My hon. Friend the Member for Ealing, North (Stephen Pound) has referred to the Merton example to illustrate that point, and other local authorities have conducted similar initiatives elsewhere.
	When local authorities promote such initiatives, they often provide what are effectively de facto pilot schemes for the national Government. If it turns out that a local authority such as Merton has developed plans that go beyond the requirements of building regulations or central Government guidance or policy, and that those plans are working well, that can short-circuit the development of national guidelines and building and planning regulations because the pilot will have already been tested in the relevant context. My hon. Friend the Member for Ealing, North has made an important point about one of the significant issues in the Bill. We have seen the importance of insulation from the efforts of the Government so far.
	Before I took the two interventions, I was talking about what had been achieved through the April 2006 amendments to part L of the building regulations with regard to insulation. Importantly, those amendments
	mean that when more than 25 per cent. of the surface area of a controlled element such as a wall elevation is renovated, the energy efficiency of the whole element has to be improved—in other words, there should be insulation. As part of the material change of use, any retained element or fitting whose thermal performance is worse than the defined threshold should be upgraded. That also involves insulation, although not of the building itself: it involves lagging around pipes, boilers and so forth. As part of a material alteration, any element that becomes part of the external envelope should be upgraded if its thermal performance is worse than the defined threshold. That is a significant change in emphasis towards insulation. That is why my amendment is important: it would bring the Bill much more in line with what the Government are trying to achieve overall on energy consumption.

Andrew Dismore: My hon. Friend presages some of the points I was going to make on the second group of amendments, and I will not go through them now. I simply say that one thing generally missing from the Bill is a consideration of any costs involved. If my hon. Friend looks ahead, he will see that one of my new clauses in the second group of amendments raises the particular issue of the cost of a variety of matters and their implications for the provision of housing generally.
	We know from research that the cost of insulation and energy efficiency measures generally can be disproportionate, given the payback time. Furthermore, the cost of adapting a house or, particularly, constructing a new one to meet energy efficiency standards can be significantly increased. However, I shall not go into those arguments now; I will save their detail until we get to the second group of amendments, assuming that we get that far this morning.
	The DCLG also said that it proposed to extend support for energy companies to provide subsidised insulation for 250,000 installations to improve the energy efficiency of existing homes—that relates to the point that I just made. We are extending the landlords energy savings allowance to cover hot water system insulation and draught-proofing, to incentivise landlords in the private sector to improve energy efficiency. That is important, because if we consider the performance as opposed to the policy, we see that although there have
	been significant improvements, the overall figures show that things are not as rosy as they might be.
	In December 2006, my hon. Friend the Member for Dudley, South (Ian Pearson), then the Minister with responsibility for these issues, answered a parliamentary question by giving figures on insulation measures carried out, including cavity wall insulation, loft insulation and double glazing. In 2000, 211,000 homes in Great Britain installed cavity wall insulation, 415,000 installed loft insulation and 2,002,000 installed double glazing. In 2005, the figures on cavity wall insulation had gone up to 240,000, but those on loft insulation had gone down to 280,000 and those on double glazing to 1,340,000. There are two explanations for that. The first is that once the work is done, it is done pretty much for ever and, because of the progress in those five years, demand for such work was tailing off. The alternative explanation is that insulation was getting a little less fashionable and people were not doing as much as they should have.
	As my hon. Friend also said in his answer, we should consider the general impact on households. Sixteen per cent. of all households in England, and in Britain as a whole, have full insulation, which means that there is 84 per cent. to go. That answers the question that I posed in relation to the 2005 figures. It is therefore inevitable that something happened to stop people doing this sort of work, particularly double glazing and loft insulation, between 2000 and 2005.
	The figures get more interesting when we look at the nature of tenure. Those for owner-occupiers are marginally better than those for the national average, with 17 per cent. fully insulated. What is very bad, however, is that for privately rented properties, at only 6 per cent. People in private rented accommodation tend to be socially excluded, and potentially from low-income households and at risk of fuel poverty, so they are at a double disadvantage in that they are probably living in less well maintained accommodation to start with. We know from the figures that their level of insulation is very poor compared with the average overall—it is only 6 per cent., which means that 94 per cent. of that group do not have the necessary insulation. That means that their heating bills will go up even though they are probably on a far lower income than the population as a whole.
	The position is slightly better for local authority households, at 10 per cent. It is also encouraging that registered social landlord—housing association—households are on 20 per cent., so they have made significant improvements above the national average as it then was. My new clause would be another incentive, via local authorities setting out requirements in planning regulations, to improve significantly on those woeful statistics.

Andrew Dismore: My hon. Friend makes an interesting point. I suspect that most people would not be able to afford the sort of construction that my hon. and learned Friend the Member for Medway (Mr. Marshall-Andrews) has been able to build for himself in terms of the cost of construction, the land involved and the insulation materials, including the football pitch on the roof.
	My hon. Friend is right in his substantive point about the educative process behind my new clause and the Bill in general, although we may be straying into Third Reading territory. The Bill would serve a useful purpose in that respect by providing a system of pilot schemes to local authorities spreading out through local authority consortiums—examples include the Nottingham declaration and Merton, which he mentioned. A local authority that was going to introduce the higher standards required by clause 1 and my new clause—the same principles apply—would have to justify those new standards to its electorate and to those conducting business or developing property in its area. There would inevitably have to be a proper explanation to local people of why it had decided to go down that route.

Andrew Dismore: My hon. Friend makes an important point. That is exactly what my new clause would achieve. It would enable his local authority, or mine, if it so wished, to get tough with landlords carrying out such flat conversions as regards complying with the regulations. The building regulations as they stand may not be as tough as they should be, and the new clause would enable a local authority to set standards—they would have to be common-sense standards—that went beyond them.
	Different areas have different housing needs and demands and different sorts of housing developments. My hon. Friend's constituency probably has a much greater proportion of flat conversions than we have in outer London, so the problems are slightly different. Under my new clause, his local authority would be able, in relation to such properties, to impose
	"requirements for insulation standards in domestic and commercial developments in their area".
	I see no reason why that could not be broken down between different types of domestic development. For insulation against noise, although we are talking particularly about that geared towards energy, there would be different requirements for a detached house than for a conversion to four flats in a former terrace. A much higher standard of insulation would be required, perhaps as much as for noise as for heat, between the floors and between the properties to either side. My hon. Friend's local authority could want to impose higher or different standards. That is the beauty of the approach taken by the hon. Member for Sevenoaks in clause 1 and in my new clause 1, which would enable local authorities to tailor the particular demands of their people to the requirements of the regulations that they wished to impose beyond the Government minimum safety net.

Martin Linton: Would there be any scope under my hon. Friend's new clause for higher standards to be imposed at a time when landlords are making renovations? One of the problems that I encounter in my constituency, as I am sure he does in his, concerns people living in Victorian houses that were converted in the 1970s or 1980s, where the conversion consisted merely of putting a new front door on each landing with no increase in the noise or thermal insulation in the rest of the house. That means that every sound made upstairs can be heard downstairs, and if there is a family living on the first floor with single people living above and below, the lives of everyone in the house are rendered impossible because basic insulation standards were not insisted on at the right time, when the original conversion was made, and they are condemned for ever to living, as it were, as three families in the same house—

Andrew Dismore: I think that my hon. Friend will find that that organisation simply deals with the question of insulation as a whole, and as I said to my hon. Friend the Member for Battersea (Martin Linton), a useful by-product of insulating a building properly for heat and, therefore, energy consumption, is a better effect in dealing with noise. Of course, the only effect produced by lagging pipes will be that they will not bang so loud if there is an airlock, but insulation between floors and in roofs, cavity walls and so forth can have a significant effect if someone is being disturbed by their neighbour's stereo. Both my hon. Friends made significant points in that regard.
	In November 2006, the new planning policy statement 3 on housing was published, which dealt with the particular problems of climate change. It said that
	"Developers and planning bodies will have to take account of the need to cut carbon emissions as well as the wider environmental and sustainability considerations when siting or designing new homes."
	That goes to the heart of my new clause. As I said in my opening remarks, we have to try to cut carbon emissions in the first place, which is done not just through the way in which the energy is produced—be it windmills, solar power or whatever—but by using less energy. The PPS3 guidance is important in that respect.
	It is important that the planning guidance is integrated with the building regulations. That is what I am trying to put across in new clause 1. Effectively, the local authority has powers under the planning laws; it does not have the power to mess around directly with the building regulations, but it can do so indirectly through the planning laws. That is why integration through the PPS supplement to the building regulations is the right way to go. The PPS supplement makes it clear that planning and climate change necessitate clear and challenging roles for regional and local spatial strategies, which are expected to help to shape the framework for energy supply in their local authority area.
	At the local level, development plan documents—the things that we are looking at to set out the basic planning framework—will set policies on the provision of low-carbon and renewable sources of energy to provide the platform necessary for securing and complementing the increasingly high levels of energy efficiency required by building regulations. Again, we see the symmetry between the need for policies on low-carbon and renewable sources of energy and the need for energy efficiency required by the building regulations. We have a statement that makes it clear that both sides of the equation have to be addressed. Paragraph 30 of the PPS supplement draft document makes it clear that planning authorities should
	"be concerned with the environmental performance of new development and with the impact of individual buildings on, and their resilience to, climate change."
	It advocates that they engage
	"constructively and imaginatively with developers to encourage the delivery of sustainable buildings"
	and to support innovation. At the same time it says that they should not be setting their own standards for environmental performance, as national standards are already set out through the building regulations, and for new homes, in the code for sustainable homes. I think that that last part is wrong. Local authorities should be in the forefront of such work.
	The document states
	"Planning authorities should assess their area's potential for accommodating renewable and low-carbon technologies, including...micro-renewables"—
	for which clause 1 provides—
	"in new residential, commercial or industrial development."
	It is also important, however, that they have regard, as the planning guidance document says, to other matters, some of which I shall pick up on later if we get to the second group of new clauses. The document emphasises, in a shopping list of about a dozen issues in paragraph 23, the contribution that can be made to meeting the energy performance requirements for new buildings through the building regulations, and by extension, through new clause 1—moving beyond those into local requirements.

Chris Mole: My hon. Friend draws attention in new clause 1 to the role of local planning authorities and their local development plan documents, which are now called local development frameworks. Assuming that new clause 1 is accepted, and the Bill is passed, in a case where a local authority had recently agreed its local development framework, should it take an issue up through supplementary planning guidance to add it back into their local development framework if it had not been able to take it into account until now?

Andrew Dismore: My hon. Friend makes an important point. Any planning document, whether it is the old-fashioned unitary development plan or the new local development framework, needs to be a dynamic document. They cannot be set in stone, which is an inevitable consequence of the Bill, regardless of new clause 1.
	There is no doubt that we all experience in our constituencies pressure from our electorate for measures to deal with the problems of climate change. Those measures can be carried out in a variety of ways, such as recycling, which local authorities can deal with directly. However, we know that among the significant generators of carbon emissions are buildings. They are probably the most significant generator after the motor car—I do not have the precise figures. We can bear down on issues relating to motor fuel or aviation fuel—one of the hot topics at the moment when considering the Kyoto goals—but we must not forget the importance of buildings.
	Most forward-looking local authorities will want to consider the Bill, assuming it becomes law, and will find it surprising if, when looking at the issue of microgeneration, they do not have similar powers to deal with insulation. That is probably an easier thing to achieve and probably has a better, more cost-effective payback than some of the microgeneration schemes. We know that some of the green energy supplies, to foreshadow an argument that we may have on the second group of new clauses, can be more expensive.

Stephen Pound: I do not think that there will be many arguments in the House today except on points of detail. My hon. Friend referred to forward-thinking local authorities. I appreciate that we cannot introduce retrospective legislation, or retrofit legislation, and a builder such as Murphys in my constituency will say that it is perfectly happy and comfortable with the requirements for extensions and new build, but is there not a danger that we could end up with a two-tier system where older converted properties are energy-inefficient and the modern ones are efficient? I appreciate that the Government are doing work in this area, but has he given consideration to that in his new clause?

Andrew Dismore: My hon. Friend makes an important point that goes back to the statistics I referred to setting out how few properties are fully insulated. If only 16 per cent. are insulated, there is a reason for that. He is right: when we are building from scratch, it is easier to comply with new requirements. With regard to the building regulations, however, if the Victorian properties to which my hon. Friend the Member for Battersea referred earlier are not modernised, converted or refurbished, all sorts of building regulations will not be complied with.
	If one considers, for example, the construction of a staircase, the treads may not be right. That is an inevitable consequence of building before building regulations were introduced. My hon. Friend asks an important question about how we catch up with the enormous backlog of 84 per cent. The position is probably a bit better now because those figures are a couple of years out of date.
	A carrot and stick approach is needed to catch up with the backlog. The carrot approach includes the warm homes initiative and the various grants that are available for microgeneration. Thought needs to be given to the matter as and when conversions or major works are undertaken. A good example would be that, when one installs a new boiler, it has to meet the new up-to-date standards because that is a requirement of the law. Some improvement is therefore inevitable.

Andrew Dismore: My hon. Friend asks a question that I do not believe anyone can answer. There are times in the life of a building when things happen—for example, replacing a boiler contributes to improving energy efficiency; conversions or refurbishments often mean major work; roofs have to be replaced every 30 years or so—and that is an opportunity to do something about insulation. When a house changes hands, what needs to be done is highlighted. Home information packs can be important in that context—I propose to refer to them later. A range of measures are needed and the Bill—I hope with my new clause—would make an important contribution to the process.
	My right hon. Friend the Chief Secretary to the Treasury made an important point when as a Housing Minister she addressed the all-party group on climate change in November 2006. She said that energy savings could be made in existing homes by taking simple measures such as cavity wall insulation, which does not have to be very expensive. The review of the sustainability of existing buildings showed that the number of homes with more than 150 mm of loft insulation increased by 4 million between 2001 and 2004, but a further 8.5 million could benefit from cavity wall insulation, which typically costs £340 to fit and pays for itself in 2.6 years. In five years, householders will get a 200 per cent. return on their investment. Earlier, my hon. Friend the Member for Ealing, North spoke about the need to educate the public about such matters. Those figures are simple to convey.
	It could take many years to achieve the payback on some of the proposals in the Bill for microgeneration. However, loft insulation and cavity wall insulation have an almost immediate effect. To revert to the point of my hon. Friend the Member for Battersea, carrot and stick measures include education as well as making grants available to less well-off households, pensioners and so on through the warm homes initiative and various local authority and London-wide measures.
	The Bill also has implications for the decent homes standard, which the Government established as a key check list of fitness for acceptable dwellings. Central Government have made significant grants available to local authorities for improvements to their housing stock. I am pleased to say that, in Barnet, we have £88.5 million from central Government for improving our council housing stock.

Andrew Dismore: Yes. I have long called for a "Barnet formula" to meet our needs, which are special to our area. Just as Scotland has its special needs, so do we. However, I digress.
	The £88.5 million can be used to tackle some of the problems that were identified earlier. Only 351,000— 10 per cent.—of local authority properties in Great Britain meet the full insulation standards. How do we tackle that? The decent homes standard and the money that comes with it is part of the solution. Decent homes standards are set separately from building regulations—indeed, their criteria are slightly higher. Performance criteria include providing a reasonable amount of thermal comfort through effective insulation and efficient heating. There is much further detail. The new clause would enable that requirement to be supported by local authorities through their decent homes grant.
	Earlier, I mentioned fuel poverty. Fuel-poor households are defined as those that need to spend more than 10 per cent. of their incomes on adequate heat and lighting. The Parliamentary Office of Science and Technology note on the matter states that some 2 million households are affected by fuel poverty. I suspect that the rising cost of energy means that the position is worsening. Without new clause 1, the Bill may unwittingly contribute to making the position worse. I make the point to presage arguments that I shall present when we consider the next group of new clauses.
	Renewable energy, from green sources, is potentially more expensive to the consumer than energy from traditional sources. If we are to start requiring renewable energy in the wider sense as part of new developments in clause 1, the cost of heating homes may increase. We could resolve that through accepting the new clause and requiring better insulation, which counterbalances the potential increase in the cost of green energy. We must do something for the 2 million homes in the UK that are classed are fuel poor. Uptake of cavity wall insulation is low and the hon. Member for Sevenoaks needs to reflect on the Bill's potential impact on fuel poverty.
	In response to an intervention from my hon. Friend the Member for Battersea, I mentioned home information packs. From 1 June last year, home owners throughout England and Wales are required to provide a home information pack when marketing their homes. It was a somewhat controversial measure, which is not fully in force. However, one of requirements is to provide an A to G energy efficiency rating, similar to that given to electrical goods, to give buyers an assessment of a property's likely running costs before they buy it.
	We all know that, if we buy a house and get a normal survey, which states that work, such as rewiring, needs to be done, we negotiate with the vendor a reduction in the price to reflect that. The energy efficiency rating element of the home information pack can have the same effect. If one is buying an expensive house with a low energy efficiency rating, one inevitably goes back to the vendor and says, "Look here, your windows are rattling, there's no loft insulation, the pipes aren't properly lagged. I've got an estimate of what it's going to cost to put it right and I want a reduction in the sale price to reflect that." I therefore believe that the energy efficiency rating is probably the most important element of the home information pack, because it is one of the moments in a building's life—when it changes hands—when something can be done about the energy requirements, especially through insulation.

Andrew Dismore: My hon. Friend makes an important point. I hope that we will come to costs in the second group of amendments. At the risk of straying beyond new clause 1, I had tabled another group of amendments that would have changed the permissive nature into a monetary nature, but regrettably Mr. Speaker did not select them for debate. Obviously I would not criticise Mr. Speaker's selection of amendments, although my hon. Friend may have done so indirectly and unwittingly. A potential problem with my new clause 1 and clause 1 is that if we do not require local authorities to do such things, they might not do them.

Andrew Dismore: I would certainly not question my hon. Friend's intentions in that respect. He made his intervention unwittingly, perhaps having read today's selection of amendments, rather than the full list that I tabled earlier in the week. I would not blame him for that, however, because there were quite a few amendments.
	I was talking about the importance of home information packs in relation to new clause 1. For the A to G energy efficiency rating,
	"Performance is rated in terms of the energy use per square metre of floor area,"
	and energy efficiency is
	"based on fuel costs and environmental impact".
	The pack will include average costs for heating and lighting, as well as, importantly,
	"how to cut costs with energy efficiency measures, such as thicker loft insulation, draft proofing, installation of double glazing, more efficient boilers or even microgeneration".
	That entirely squares with the point that my hon. Friend the Member for Battersea made about information and education.
	It will be interesting if a local authority that has decided to go down the new clause 1 route pulls together some samples of home information packs—they are produced by the vendor, so presumably an authority could collect them together from estate agents—to see whether there is a general pattern in its area. That relates to the point that I made to my hon. Friend earlier about different areas having different requirements, because of different types of property configuration. A local authority could go round the estate agents and collect a good sample of HIP energy efficiency ratings, which could then inform the level of the requirement that it would like to impose through new clause 1 for insulation. If one street turned out to have a particular problem, the local authority could so something about it. That would be a good way to proceed.

Andrew Dismore: My hon. Friend makes an important point. The Bill as drafted makes no distinction between forms of property—it just leaves the question open. Clause 1 as drafted talks about planning policies in general terms, but does not refer specifically to domestic or commercial properties, which is something of a lacuna. Without wishing to tread on Mr. Speaker's selection, I should point out that I had tabled amendments to draw out that distinction elsewhere in the Bill. If we are going down the route proposed, it is important to make it clear—as my new clause 1 does, but existing clause 1 does not—that we are talking about both domestic and commercial properties.
	There is no way that the home information pack could refer to commercial properties—I suppose that it would have to be called a commercial property information pack or something like that.

Andrew Dismore: Indeed.
	Home information packs have been controversial, but their object is to protect the purchaser, to try to reduce the costs of the conveyancing transaction and to speed the process up. The process is different in commercial sales, because people are buying for different reasons and the buildings will be all sorts of different shapes and sizes. With domestic properties, there is Buckingham palace on the one hand and my flat on the other. In between, however, we are talking about a pretty standardised range of properties. A commercial development could mean anything from a shop to a factory or office block. That would make things rather difficult, given the scale of some of those buildings, so I am not sure whether that would be the right route. However, local authorities would be specifically empowered under my new clause 1 to impose insulation requirements on commercial buildings.
	I suspect—although I am afraid that I have no evidence for this in the research that I have done for today—that the amount of energy lost through poor insulation in commercial buildings far outweighs that lost in domestic buildings, given their scale and the fact that the workers in them do not necessarily have any incentive to save energy and reduce costs. There may be such incentives for the owners, but not necessarily for those working in the buildings.
	It is important that commercial premises should be brought within the ambit of the Bill. When the hon. Member for Sevenoaks responds on new clause 1, perhaps he can say whether clause 1 as drafted is intended to include both commercial and domestic buildings. For the avoidance of doubt, I framed my new clause 1 to make it clear that it was so intended.

Andrew Dismore: Probably the latter. I entirely agree with my hon. Friend's point. The problem is that for huge buildings that may also be old—perhaps dating from the 1930s or 1940s—the cost of insulation, reflecting the scale of the buildings, may be astronomical. My hon. Friend may well be right about making energy savings, but my point related to those working in the building, who have no personal incentive to carry this out. The building owners and the commercial company operating within the building certainly would have an incentive, which is why the new clause gives local authorities the power to make requirements for better insulation in respect of commercial as well as domestic buildings. I wanted to spell it out that I was talking about not only homes but both sides of the equation. That is why I framed new clause 1 as I did—precisely to answer my hon. Friend's point and to ensure that commercial buildings are covered as well.
	When I looked at the website of my own local authority, Barnet council, I found that it was rather thin on this aspect. It says that the Home Energy Conservation Act 1995
	"places a duty on local authorities to improve the level of energy efficiency in all of their houses by 30 per cent. over 10 years. Since then, energy action areas have been introduced in Barnet to help improve the energy efficiency in the borough's housing in line with the Act".
	I suspect that most of that is being provided for through the decent homes grants from the Government. I am afraid that Barnet's local authority does not have a very good record or reputation for attributing where resources come from.
	The most important aspect here is regeneration, which has been attempted in respect of three big housing estates in my constituency. The regenerations have been talked about for seven years, but very little has been done. Even if the work on one were to start tomorrow, it would probably take, including those seven years, 25 years to complete, yet these homes are woefully energy-inefficient. Bearing in mind the large number of properties on the estates requiring regeneration, I suspect that Barnet council will not meet this particular target.
	The building regulations, which we have already discussed, are relevant, as is the standard assessment procedure for the energy rating of dwellings. In Barnet, the national home energy rating is relevant and a minimum standard of eight will be sought. As regards the standard assessment procedure, a minimum rating of 81 or a B rating will be required for new homes. Why it is a B rating, I do not know. Perhaps it is a matter of Barnet doing a bit of backsliding.
	To conclude my remarks on this group of amending provisions, I hope that I have set out why I believe insulation is an important part of the equation when we are thinking about local authorities having new powers to deal with energy issues and climate change. We all want measures to be taken to reduce the impact of climate change. The Bill goes a long way towards achieving that, but I think that the hon. Member for Sevenoaks left half the equation out. I hope that my new clause will find favour with him and with the Government. We can then move forward with an improved Bill that deals with both sides of the coin.

Chris Mole: Before the hon. Gentleman moves on, does he agree that the new clause, in distinguishing between domestic and commercial, has interesting implications for the new breed of construction, which I call mixed-use development or the live/workspace type of development. Sometimes it is viewed as domestic, other times commercial, because people can live and work in the same space. That would potentially fall outside either of the individual classifications suggested by my hon. Friend the Member for Hendon (Mr. Dismore), and would require yet another classification. Is it not ironic that one of the best examples of such projects is BedZED—the Beddington zero energy development—in Merton, which is a borough that has been referred to several times already?

Parmjit Dhanda: I congratulate all hon. Members who have so far contributed to the debate: my hon. Friends the Members for Hendon (Mr. Dismore), for Ealing, North (Stephen Pound), for Battersea (Martin Linton) and for Ipswich (Chris Mole), and particularly the hon. Member for Sevenoaks (Mr. Fallon). He has just made a point on development that I entirely agree with: the terms "domestic" and "commercial" as used in the new clause proposed by my hon. Friend the Member for Hendon would not—to answer the question of my hon. Friend the Member for Ealing, North—cover Craven Cottage football ground, whereas the generic term of "development" is far more likely to do so.
	It is important at the outset to thank the hon. Gentleman for the work he has done to bring the Bill to this stage, and we believe that his amendments that were agreed in Committee have turned it into a workable piece of potential legislation without compromising its original aims. The Bill is coherent and clear in its application, and it deserves to be supported as it currently stands.
	On Second Reading, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hartlepool (Mr. Wright), who has responsibility for housing, said we were not initially convinced that the Bill was necessary. I want to make it clear that we are happy to support the Bill as amended. We recognise the positives that can be taken from placing such a power in primary legislation. The technical amendments debated and agreed in Committee were necessary to ensure that the Bill achieves its intended purpose.
	The Bill will sit within the wider package of initiatives that we are taking to tackle the impact of climate change. As my right hon. Friend the Minister for Housing said in Committee, we are introducing a raft of measures that reinforce our commitment to cut carbon emissions.
	The Climate Change Bill, the Energy Bill and the Planning Bill all take steps to help us to meet our objectives. The Planning Bill—I was fortunate enough to serve on the Committee—will take action on climate change in the preparation of local plans. Local planning authorities will need to include in their development plans documents and policies designed to ensure that development and use of land in their area contributes to mitigating, and adapting to, climate change. That duty was welcomed by all Committee members.
	Our Climate Change Bill, which is currently progressing through Parliament, sets out our plans to tackle climate change over not only the next few years, but the next 50 years. It demonstrates to the world that we are determined to grasp the challenge of climate change.

Parmjit Dhanda: I thank the hon. Lady for making her point, although I do not think she is making a commitment now in the Chamber for additional subsidy. I think that Members of all parties agree that the Warm Front grants scheme is effective and good, and that we all welcome it.
	I am grateful to my hon. Friend for introducing new clause 1 and consequential amendment No. 11 as it has given us an opportunity to flesh out some of the issues behind those amendments. He wants to introduce absolutely clarity that local policies can cover insulation standards in buildings as opposed to other aspects of energy efficiency, such as the efficiency of appliances. I can also see that the new clause and amendment No. 11 logically fit within the structure of the Bill, but, as the hon. Member for Sevenoaks said, they are unnecessary. The existing clause 1(1)(c) does what my hon. Friend wants, because energy efficiency standards would cover insulation standards as well. It is common sense that any energy efficiency standard in relation to development would be taken to include standards of insulation. Clause 1(1)(c) as currently drafted makes it clear that energy efficiency standards may
	"exceed the energy requirements of building regulations."
	The energy requirements of building regulations are defined in clause 1(2), which states that they encompass both "energy performance" and the
	"conservation of fuel and power."
	The relevant section of the building regulations which deal with the conservation of fuel and power—part L—covers insulation by imposing requirements to make reasonable provision to limit heat losses and gains through thermal elements and other parts of the building fabric. Technical details of what would constitute reasonable provision to limit heat losses is given in approved document L. Approved documents are guidance given by the Secretary of State as to how the requirements of the building regulations can be complied with. The approved document includes references to design standards and relevant technical parameters that relate to thermal efficiency and, hence, insulation. Similarly, section 1 of the code for sustainable homes, again supported by the technical guidance, sets out that one of the parameters for achieving the energy performance standards relates to limiting heat loss.
	Clearly, the highest level of energy efficiency standards and insulation standards are vital to ensuring that we reduce carbon emissions from homes. We have taken substantial steps on that over recent years. We most recently set out the energy performance standards—measured in terms of emissions of carbon dioxide from the use of the building—in the 2006 buildings regulations. The level set in the 2006 regulations is about 40 per cent. higher than the standard set before April 2002. As part of our policy to achieve zero-carbon new homes from 2016, we have announced that we will progressively tighten the energy efficiency standards in the building regulations over time. We will set a standard in 2010 that will represent a 25 per cent. improvement over 2006, which is the equivalent of the level 3 standard in the code for sustainable homes, and a standard in 2013 that will represent a 44 per cent. improvement, which is the equivalent of the code's level 4.
	The achievement of those energy-efficiency standards is not purely about insulation; other aspects need to be tackled, such as lighting, and builders can also use renewable and low-carbon technologies to help achieve the standards. Clearly, however, effective insulation to prevent heat loss is crucial. The Department is working closely with industry stakeholders on the preparation of a consultation document on the detail of the 2010 changes—we plan to publish it for consultation early next year—including changes to the relevant technical standards that define thermal insulation.
	I assure my hon. Friend the Member for Hendon that we are driving forward a strong policy on improving the relevant standards. There is unfortunate ambiguity in the drafting of new clause 1, because by referring only to "domestic and commercial developments", it could be construed that it does not cover other types of development—I presume that that is not his intention. That is why the Bill uses the general term "development" instead. For those reasons, we urge him to withdraw the motion and not to press the subsequent amendment No. 11 to a Division.

Stephen Pound: I am grateful for my hon. Friend's intervention. Few Members of this House have delved deeper into the interstices of its procedures than he has, and I entirely take his point. I was not just being polite when I made those comments, because I think the Bill was improved in Committee. It could have been improved even more, but we are all capable of greater improvement.
	Certain aspects of the Bill slightly confuse, and possibly concern, me. One is the issue of the permissive versus the mandatory. The hon. Member for Sevenoaks (Mr. Fallon) has deliberately included words such as "may" and "reasonable". People whose will is good will react to those words in a positive way and will seek to match the requirements and aims of the Bill. In the same way, the Mayor of London wishes to have a no-alcohol policy on the tube that will be self-policing. One can rely on the good nature of human beings, but what concerns me is that there are people who will always seek ways around such measures.
	I have mentioned former local government planning officers, who seem to work as consultants nowadays. Many of them will be as busy as Jimmy Bullard, as we say in west London, trying to find their way around words such as "reasonable" and around the permissive nature of "may". I can understand that the hon. Gentleman is on the side of the angels. Nobody will ever argue for energy-inefficient buildings or against energy-efficient and locally-sourced materials—I sincerely hope that they would not do so. However, in a commercial world, there will always be people who seek to respond to the squeezing of margins by a reduction in standards. I am concerned that when an expression such as a "reasonable" standard is used, one opens the door to an unreasonable action by a commercial builder who understandably seeks to maximise profit. I see a terrible vision ahead; I see people in the Planning Inspectorate in Bristol sitting there day after day trying to analyse, much as medieval theologians calculating the amount of angels dancing on the head of a pin, exactly how reasonable is "reasonable".
	Being, if I may say so, a reasonable person myself, I have looked beyond that point and tried to see how the provision could be more tightly detailed. The hon. Gentleman said that one cannot have a completely comprehensive list. That is where new clause 1 comes in, because it details the insulation implications and consequences. Amendment No. 11 implies that the insulation standards would be delineated, and if those provisions were accepted, the Bill would be considerably toughened up. If, by our accepting them, the Bill was not jerry-builder-proofed, we would have gone some way towards reducing any amount of conflict later.
	The key point in new clause 1 is its emphasis on insulation. Making provision for energy use and energy efficiency in local plans is obviously the first step, and it is one that will be supported by the hon. Gentleman and the Government, and, I hope, by all men and women of good will. However, that is only half the battle, because even if there is energy-efficient construction, there will still be a need for insulation and perhaps for additional insulation in areas that we have not even gone into before. Perhaps new materials will soon become available that will provide an even greater degree of energy efficiency through insulation, so we need to include the insulation component. Until recently, the fibres used in loft insulation were not only non-biodegradable, but appallingly sourced and of high energy cost. They may have saved heat loss, but they did so at an enormous cost in the production side of the equation.

Andrew Dismore: My hon. Friend the Member for Ipswich (Chris Mole) referred to the materials used in construction, particularly timber. In my constituency, there have been arguments about whether timber-framed buildings should be used. An enormous, timber-framed block of flats—I forget how many storeys—was going up opposite the Metropolitan police training college, but it caught fire and rapidly burned to the ground, threatening the training college and the nearby local police station. It was spectacular, but is now being rebuilt in concrete. I suspect that any contribution that it made to energy efficiency was offset by the amount of carbon that was released by that timber disappearing into the atmosphere.

Stephen Pound: There are times when I wake up in the middle of the night in fear that I am in a dreadful Friday morning loop in which we come up with increasingly bizarre possibilities. As I stand in this glorious Chamber that is made almost entirely of wood, I have to ask myself whether I am in any danger. I do not think that I am.
	My hon. Friend the Member for Ipswich made an extremely important point. Construction material is significant, in relation to energy use and efficiency; I hope that no one would argue with that. The massive increases and changes in concrete technology give us a whole range of new options, but I hope that we will continue to use wood for a great many years. When we think about insulating a building, we still think about traditional loft insulation, double glazing, lagging and insulation within the structure of the building, but the structure itself can be a component of insulation.
	When an hon. Member introduces a Bill, even one as well regarded, respected and well thought out as the one before us, people will always seek to add to it. There is a constant conflict between measures being over-specific or far too general. By and large, the hon. Member for Sevenoaks has struck a good balance, because he has set a target and, by presenting the Bill, he has sought to give local authorities the power to include and incorporate that target in their plans. The way in which he has done that allows a structure to exist without it being over-detailed. However, new clause 1 and amendment No. 11 would add to it. They would not limit or handcuff the free spirit that is inherent in the Bill, but would aim and direct it a little more.

Stephen Pound: My hon. Friend makes an extremely important point, which is relevant to home information packs, although I do not wish to rehash the whole argument that we had on those. His point chimes with mine, in that, by and large, we tend to seek examples of good practice that have commercial benefit. I remember visiting a property in a place called Hangeland, in Norway, where they use a commercially driven system of heat insulation, not just because that is environmentally correct, but because it is an advantage to do so in that part of the world, where there is a huge fiscal advantage. That advantage will inevitably roll on when such properties are sold.
	As my hon. Friend the Member for Hendon said in his well received contribution, we must consider, in the drafting of new clause 1, those who are not owner-occupiers. I understand the point that my hon. Friend the Member for Battersea (Martin Linton) made, but a huge number of people would not be affected—those in the rented sector. As my hon. Friend the Member for Hendon said, many of them, although they might not be in the poorest categories, might have a propensity to find themselves in fuel poverty and in poverty generally. By making the Bill more specific and mandatory, new clause 1 would widen its remit and assist such people. We know that the Bill is for good people. If one is building a new home, one would see the advantage of this idea. Even some of the most antediluvian councils in the land—there might be one or two left that instinctively oppose such measures—would see an advantage, if not for the planet in the medium to long term, but for the pocket in the short term.
	I am concerned about the people who are excluded, and new clause 1 and amendment No. 11 go some way towards extending the remit and benefits of the Bill. I was going to say that they extend the sunshine of the Bill to such people, but I should say that they extend the energy-efficient sunshine of it. The measures are therefore worthy of consideration. I am cheered, as I always am, by the words of my hon. Friend the Minister, who has studied the Bill with great effort and has made some extremely supportive comments. It would not be entirely inappropriate for us to extend the remit of the Bill and tighten, focus and direct it by accepting new clause 1 and amendment No. 11.

Andrew Dismore: My hon. Friend makes an important point, and it explains why I have phrased new clause 3 as I have. In our debate on the previous group of amendments, we talked about permissive powers for local authorities. New clause 3 contains a mixture of the permissive and the mandatory. It states:
	"When exercising its discretion under section 1",
	which is permissive,
	"a local planning authority shall consider the desirability of increasing the extent of microgeneration in its area."
	I have tried to square the circle by saying that, if a local authority is going down this route, it must take into account the need to increase microgeneration in its area.
	Microgeneration is not a complete panacea to the problems that we are talking about in the context of the Bill. There is always a problem, for example, about the noise created by wind turbines, and they can also be pretty unsightly and rather big. We therefore have to ensure that conservation area status is protected, while at the same time trying to strike the right balance. The original consultation by the Government suggested that local authorities would retain the right to restrict planning permission in cases where the benefit of the technology was questionable.

Andrew Dismore: My hon. Friend makes an important point. The giant wind turbines on the offshore wind farms are entirely different from what we are describing in the Bill, but he is right; I know from my own caseload of a couple of cases that have arisen in the past few months in which people have applied for permission to install a wind turbine on their roof and been turned down by Barnet council. I have not seen the full details, or the rationale for the decision; the applications have simply been turned down.
	There is an argument that domestic wind turbines are not particularly cost-effective, unlike slightly bigger turbines. For example, St. James's school in my constituency has put up its own wind turbine, which has proved very effective in providing energy for the school. The school also sells back to the grid some of the energy that it does not need. It has been able to make that turbine an effective item. There is a question about whether domestic wind turbines will ever achieve the payback that is claimed for them. Of course, other forms of microgeneration go beyond that and we need to see what local authorities can do to encourage microgeneration in their area.
	Let me move on to new clause 7. Clause 1 permits a local authority to set requirements for a proportion of energy to be provided from
	"renewable sources in the locality of the development."
	It is not clear to me whether
	"the locality of the development"
	refers to where the electricity is coming from or where it is being used. That is an ambiguity that needs to be resolved. I have assumed for the purposes of new clause 7 that the intention is that the renewable source itself should come from somewhere in the locality of where the development occurs.

Andrew Dismore: This is a serious problem. I can understand why the word "local" is used in this context, because a development on a local authority boundary could want energy supplies from the neighbouring council's area, just over the frontier. If one referred to a "local authority area" in that context, that might not achieve the intended objective. On the other hand, the problem with defining the word "local" is that it is the same as asking, "How long is a piece of string?" It makes things difficult. I have used the words "local supplies" in new clause 7 to mirror the construction of clause 1. The definition is vague and ought to be considered when the Bill goes elsewhere, assuming that it does. My hon. Friend the Minister might be aware that I tabled amendments to try to flush out the problem by deleting those words, but they were unfortunately not selected for debate, so I am a little constrained in how far I can argue that particular point. He has highlighted a problem with the Bill, but as those amendments were not selected we will not be able to debate it at length today.
	What do we mean by local supplies? In general, if we are talking about renewable energy across the board, all council areas have access to renewable energy if they agree to sign up to a green tariff with an energy company and are prepared to pay for it. The cost is not cheap, although it obviously depends on the supplier. If a local authority wanted to go into microgeneration and supply its own energy, it could build a small microgenerating power station, for example for a housing estate. I have already mentioned the tiny one that has been built by a school in my constituency. Such a development could provide heat and light for homes in the local area. Indeed, any excess could be sold back to the energy companies or the national grid. There are examples of good practice where that has happened.
	The real problem with the Bill is that we do not know what local means in this context. The Government have set a target of generating 10 per cent. of all electricity from renewable sources by 2010, mainly by requiring the electricity companies to provide for green energy generation. As we know, progress has been slow compared with what we would all like to see.
	Some local authorities have been doing the work themselves, and a trawl through the internet has produced some interesting examples. Woking council—I am not making a party political point—proclaims itself as the market leader in this respect. Its website talks about local sustainable energy systems, and its approach is
	"to supply customers on private wire combined heat and power (CHP) networks as well as implementing energy and environmental services in both the public and private sectors",
	working in
	"partnership with the private sector".
	The council claims to be the first UK authority to have adopted a comprehensive climate change strategy. I am sure that many others would argue the toss about that. Ultimately, the proof is in the pudding.
	The Nottingham declaration involved a number of local authorities that came together in partnership to decide how best to support one other in taking action to adapt to the impact of climate change and reduce carbon emissions. Some 200 local authorities signed the Nottingham declaration, but signing a declaration is not the same as doing something, which is why new clause 7 is important. It would achieve something.
	In London, through the London Development Agency, we have seen progress through the setting up of the London Climate Change Agency, which is a municipal company owned by the LDA. Until the last election, it was chaired by the Mayor. Whether the new Mayor will decide to chair the agency along with the Metropolitan Police Authority, alongside all the other things he intends to do, remains to be seen. Obviously, that will be a test of his commitment to these issues—but I digress.
	The LCCA has set up a joint venture energy services company or ESCO to develop decentralised energy schemes for London. It designs, finances, builds, owns and operates local decentralised energy systems for new and existing development. It was established as a private limited company. The LCCA has a 19 per cent. shareholding while EDF, the commercial partner, owns 81 per cent. That is a way in which a local authority can do something about the need to improve on renewables and to look at the local production of energy. The fact remains that when we talk about green electricity, so long as the premium is paid there should be no limit for domestic use. The fact is that it is more expensive. The data on installations in social housing put the costs of solar water heaters, for example, at £600 per dwelling. It can be quite an expensive operation.
	In new clause 7, I am questioning the meaning of clause 1. In practice, green energy will come from the power companies through the grid. It is unlikely to be produced locally except through microgeneration schemes. Whether a microgeneration scheme will produce enough electricity beyond the immediate requirements of the people who have installed it is another matter altogether.

Andrew Dismore: My hon. Friend makes that remark, but one can hardly criticise the municipal fathers of 100-odd years ago for not having foresight about what might happen through climate change because of the use of coal-fired power stations. Unfortunately, we now know what the consequences were. My hon. Friend is right. We need to think about whether local authorities can take the initiative in building their own microgenerating power stations, whether they use wind turbines or some other method.
	New clause 7 tries to square the circle with clause 1, because it is open to question whether somebody who has already set up a microgeneration system would be able to provide enough power to fuel another construction. I have some problems with the way in which clause 1 is framed, and new clause 7 is an attempt to resolve those problems.
	New clause 8 is probably the most important in the group. It tries to get to the bottom of what we are talking about. It addresses the costs of what the Bill will expect people to do. The issue is not the cost to the local authority, but the cost that a local authority will impose on new developments in its area. If new developments are to be required to use renewable or low-carbon sources, or to generate their own electricity, a price tag will be attached. Likewise, if they have to comply with energy efficiency standards, on insulation or anything else, that also has a price tag attached. Especially in the context of domestic developments, that price could have an impact on the provision of affordable housing in a local authority area.
	If we require developers to do x, y or z, over and above the ordinary building regulations or planning requirements, they may say that they will not include the 50 per cent. of affordable homes required under other planning policies, because that would no longer be cost-effective and they could not make sufficient profit. Or developers might argue for a relaxation of the threshold of number of properties before the 50 per cent. rule kicked in. That assumes that we will still have the 50 per cent. rule in London, as the newly elected Mayor has made a commitment to abolish it.
	My concern in new clause 8 is the impact of the Bill on housing supply, locally and city-wide, and on Government targets. If we make development too expensive, developers will not build new houses. Solar power, for example, can cost at least 10 times as much as power from conventional sources and is relatively inefficient, as has been found even in Australia, the land of sunshine. More generally, renewable power costs are two to three times those of conventional sources, which can put them beyond economic viability. The cost of an energy-efficient home can be between 40 per cent. and 50 per cent. more. It may be cheaper in the long run, but a £7,800 heat pump will take 15 years to pay for itself, and solar panels that cost £4,500 will take 37 years. Built from scratch, a zero-carbon home can cost some £30,000 more than a normal house, based on current technology prices.

Martin Linton: Sweden does not have the same housing shortage as we do, although it does have a housing need, and that is a result of Government policies over the decades that have ensured that the housing supply remains in touch with demand. If we have not done that in this country and, in the process, raised the price of existing houses, the lesson is that we should have more Government action to ensure the supply of housing at whatever level would overcome our problems.

Andrew Dismore: Thank you, Madam Deputy Speaker. I object to the hon. Gentleman's suggestion that I am engaged in some sort of filibuster—I am not. The Bill received minimal scrutiny in Committee, so it is important that it is properly scrutinised and discussed now. There was no consideration whatsoever in Committee of the costs involved in bringing the Bill into effect. I am not saying that society at a whole should not meet those costs, but if the House is going to pass the Bill, it should be aware of what the costs are, so it is appropriate that I take a little time to set them out. If I was out of order and filibustering, you would be the first to stop me, Madam Deputy Speaker, because that would be against the rules of the House, of which I am well aware, although the hon. Gentleman is not.
	My point about the costs of construction flows from the intervention made by my hon. Friend the Member for Battersea (Martin Linton). On the basis of information that I have received from the Parliamentary Office of Science and Technology, it appears that the additional building costs for a zero-carbon home, compared with a typical house, would be in the region of £35,000 to £55,000. The source of that figure is a December 2006 article on thisismoney.co.uk. A report for the Renewables Advisory Board estimates that the additional costs for a new development in 2016 would be an average of £6,000 a dwelling in a new development, with the figure ranging from £1,000 a dwelling for flats in a large-scale rural development—in response to the hon. Member for Falmouth and Camborne (Julia Goldsworthy), we are not going to forget rural developments—to £13,000 for houses in small developments. The process would thus be quite expensive.
	The BBC recently reported that the first zero-emissions home had been unveiled. The house, which was produced by a company called Kingspan, was the first that had been designed to achieve level 6 on the code for sustainable homes. It was trumpeted that the house's annual energy bill would be only £31, compared with £500 for a standard new home of that size. So there is a saving, through smart metering and so forth. However, the company had to admit that the building cost was 40 per cent. greater than that for standard homes.
	If we are to impose those standards on developers through clause 1, the hon. Member for Sevenoaks (Mr. Fallon) needs to be aware of what the impact on development will be. If it will mean that every new home will cost 40 per cent. more, I suspect that there will be 40 per cent. fewer new houses as a consequences—well, the maths does not quite work out, but he gets the point. I have dealt with the issue of the Renewables Advisory Board, which gave an estimate of up to £13,000.

Andrew Dismore: My hon. Friend makes an important point. Amendment No. 12, which follows this group of new clauses, suggests that we be a little more flexible about the commencement date so that we can take account of such matters, and can consider whether we are ready to introduce the mechanisms straight away, or whether they would have the unintended consequence of reducing housing supply. That is an important consideration.
	There is no doubt that new construction offers the opportunity to pump-prime new on-site technologies and develop cost-effective systems, particularly in urban areas, where we will potentially be developing at much higher densities. In Mill Hill in my constituency, we are considering a major development of about 2,500 homes, according to the latest tally, on the former Ministry of Defence site at Inglis barracks. My hon. Friend may be familiar with the site, as the British Forces Post Office has just moved from there to a site in the general direction of his constituency or a little bit beyond it, near Northolt. The point is that as part of the overall plan for the area, we were trying to see what could be done to make the development much more energy-efficient. That is the right way to go, because it is much easier to ensure energy efficiency in major, large-scale new developments than on small-scale developments.
	The Parliamentary Office of Science and Technology told me that in general terms the cost of building an energy-efficient home is £1,500 per sq m; for a normal, or non-energy-efficient, home, the figure is £1,000 per sq m. The best example of what can be achieved is the result of the challenge set by the former Deputy Prime Minister, my right hon. Friend the Member for Kingston upon Hull—I forget what bit of Hull he represents—

Andrew Dismore: I thank my hon. Friend; my right hon. Friend's constituency is Kingston upon Hull, East (Mr. Prescott). He set companies the challenge of building a £60,000 house that would meet eco-standards. A German company was able to do it by making all the parts of the house in a factory and putting them together on site. Apparently, that is called an MMU. I do not know what MMU stands for.  [Interruption.] I think the first letter stands for "modular" and the last for "unit".
	Of course, the suggestion is that prices will drop as demand increases. As we have mentioned, an energy-efficient house works out rather cheaper in the long term. The Government are now encouraging that modern method of construction, or MMC—an MMU must be a "modern method unit"—which they think can achieve a step-change in the construction industry. That method involves prefabricating houses in factories. The potential benefits are faster construction, fewer defects and reductions in energy use and waste—or so it is claimed. Hon. Members may be aware of the old prefabs that were put up after the second world war to meet the housing crisis; they were far from being any of those desirable things.

Andrew Dismore: My hon. Friend is right. As I have said, one must be sceptical about prefabrication—it may have a new name, such as MMU or MMC, but ultimately it is prefabrication. The question is whether it will produce quality homes. I have mentioned the prefabs that were erected immediately after the second world war. As a young boy, I had a friend who lived in one, and they were not nice houses or substantial constructions. Many of the blocks erected in the 1960s were built from prefabricated units, and we currently face the problem of knocking them down and starting again.
	The question is whether standards of prefabrication have significantly improved to enable such houses to be built effectively. I did not see the £60,000 house that the German company put together, so I do not know whether it had lasting qualities, but some new houses that are built on site—we all have such private sector developments in our constituencies—have all sorts of construction problems. I have received all kinds of complaints about houses that were built by companies that are household names. In those cases, even though the quality of the construction is covered by the house builders guarantee, the construction is not as good as it should be. There is a general question about standards—ultimately, you pays your money and you takes your choice. If we can use that mechanism to produce affordable, energy-efficient, high-quality houses, it must be welcome. However, that is a big if, and my hon. Friend was right to raise that point.
	While MMC is less expensive than traditional methods, some house builders have suggested that the costs are 7 to 10 per cent. higher. Such construction methods may well enable properties to be built more quickly than would otherwise be the case through standardisation, and if we are going to try significantly to increase housing supply, they may provide one of the answers. The building regulations set minimum performance standards, which may well be a way of resolving the issue.

Stephen Pound: I willingly drag my hon. Friend back from east Yorkshire, although some in the House may wish that he was heading in the opposite direction. On my hon. Friend's comments on new clause 8, is there not a fundamental dichotomy at the heart of the Bill? It is almost a case of, "Make me good, but not yet." There is no point whatever in having energy-efficient homes if people do not want to live in them or if they cost too much. Prefabs are very popular; Baird avenue in my constituency was built before the war and it is very popular.

Madam Deputy Speaker: Order. I suggest that the hon. Gentleman confine his remarks to the content of his new clause and is not diverted away from that.

Andrew Dismore: I try to treat interventions as seriously as I can, Madam Deputy Speaker, so thank you for protecting me from any more that are not relevant to the issue.
	Last year, only 10 per cent. of new homes in my constituency were affordable—the worst record in London. If we include properties that were brought back into use, which my hon. Friend the Member for Battersea talked about earlier, the figure reduces to only 8 per cent. If the costs of housing development go up dramatically—say by 40 per cent., as some have suggested—that could have a significant impact on the ability of the London borough of Barnet to deliver the affordable homes that it has so far shown itself to be unable and/or unwilling to deliver.
	I am sure that the hon. Member for Sevenoaks does not want a reduction in affordable housing to be a potential consequence of his Bill. Perhaps he could indicate how much impact he thinks the additional costs on a local authority that would flow from new clause 1 would have on affordable housing. We are trying to achieve two desirable objects—reducing energy consumption or using energy from green sources and, at the same time, doing something about the housing shortage in my constituency, in London, and more generally across the country. He needs to consider the price tag of his Bill on a local authority considering whether to impose requirements that go beyond the national requirements. It is good to do green things, and his Bill is a good thing—we all agree on that, I hope—but we must look at the other side of the equation. Local authorities would be given these powers and told that they could impose better standards—a good and desirable thing—but they could get carried away by the great achievement of greening their borough and not think what the longer-term consequences might be.
	New clause 9 suggests that when a local authority decides to exercise its discretion there should be maximum consultation. I hope that the hon. Member for Sevenoaks will not object to new clause 9 when he responds. If we are in the era of consultative government, it is essential that people who will be affected by decisions are consulted about the consequences of those decisions. First, we need to consult local businesses and house builders because they will be directly affected if they are expected to meet higher standards. Residents associations and social housing providers also ought to be consulted for the reasons we have already discussed. Residents associations should be consulted if a new development is to go ahead so that we can get the consumers' point of view on whether they are prepared to pay an extra £20 a year to have their energy provided from green sources.
	Social housing providers should be consulted because of the impact not only on their tenants but on their ability to meet housing needs, so before any decisions are made to exercise discretion, it is essential that the hon. Gentleman accepts that, at the very least, appropriate consultation should take place. There is no need to go beyond the list that I have set out, and I am prepared to consider other suggestions. I do think, however, that new clause 9 provides for the minimum that should be required of a local authority in setting out its policies.
	I hope that when the hon. Gentleman comes to reply in what has been a short but, I hope, illuminating debate, he will reflect on some of what I have said, such as the need to consider the extent of microgeneration in the local authority area—we had a difficult discussion about locality and what it means—and take into account the availability of local supplies of such energy, and there are difficulties about the definition of locality in clause 1, the costs involved, the impact on housing, and the essential fact that people must be consulted if additional obligations are to be imposed on them.

Michael Fallon: The hon. Member for Hendon (Mr. Dismore) asked me to reflect on various points. I am doing that and will continue to do so.
	We are talking about a group of new clauses, and it might be useful if I addressed the issue of cost. The hon. Gentleman is quite right: costs are an important part of the move towards alternative energies and high costs are one of the reasons why that move has been so slow. I want to say several things about costs. First, as the hon. Member for Ealing, North (Stephen Pound) reminded us, the Bill is permissive. It does not instruct any council to do anything, so a council concerned that the costs, for example, of requiring microgeneration in its area are too expensive because of the features of that area does not have to use the scope of the Bill. It is permissive, and does not impose costs on a local authority that does not want such costs imposed on it.
	Secondly, I took care to consult the London borough of Merton, which pioneered the Merton-style rule, and I received assurances as to what the impact was. I would not be promoting the Bill if I thought that it discouraged the amount of affordable housing provided borough by borough or district by district. Merton reassured me about that, and indeed, it has gone further. It has found no developer in the past four years who had any difficulty in complying with the requirements. I hope that that reassures the hon. Member for Hendon on the issue of cost.
	Just as the hon. Gentleman has asked me to reflect on cost, I ask him to reflect on another cost matter. Many alternative technologies—wind turbines, solar panels and so on—are relatively expensive. All new homes have to be zero carbon by 2016—only eight years away. Unless we get going and do more locally as well as centrally, the supply chain—the micro-industry—will not be able to gear up and reduce the costs that derive from greater economies of scale. I hope that he will reflect on the fact that passing such a Bill will reduce overall costs because more councils will follow Merton's lead and the Government's PPS, and eventually the industry will tool up and costs will come down.
	New clause 8 deals with viability. The Bill provides that, whatever a local authority does, it must be consistent with national policies. I am sure that the Minister will confirm that it is Government policy and part of the climate change planning policy statement that local authorities must consider viability. That is therefore one of the national policies to which they must have regard under the measure.
	I am slightly worried by the phrasing,
	"shall take into account"
	in new clause 8 because it could weaken the Bill. A developer who appealed against a micro-energy requirement that a council was trying to impose on him because he wanted to bring in all the energy from pylons could argue that it had not taken the cost sufficiently into account.
	Let me deal with new clause 3. Local authorities must already have regard to several statutory requirements on microgeneration. The Climate Change and Sustainability Act 2006 requires councils to have regard to the energy measures report, which the Government produce and revise from time to time. The new clause would therefore simply add an overlapping statutory requirement, which we do not need.
	New clause 7 would require local authorities to take account of the availability of microgeneration in their area. The climate change planning policy statement already requires that. Councils have to understand local feasibility and the potential for renewables and low-carbon technologies in their developments. Again, the wording,
	"shall take into account"
	slightly waters down the Bill's point. I want to permit local authorities to impose a requirement of up to 10 per cent. of energy—or whatever ceiling they have set. New clause 7 would not strengthen the Bill.
	New clause 9 deals with the duty of consultation. We should be concerned about consultation and ensure that it is as full as possible. The Town and Country Planning (Local Development) (England) Regulations 2004 already impose a requirement on local authorities to consult widely when drawing up their local planning frameworks. New clause 9 is not inclusive. It mentions local businesses, house builders, residents organisations and social housing providers, but does not include energy providers or commercial developers, who may have a view on viability. I would therefore prefer the consultation duty to remain as it is under the general town and country planning regulations.
	We are considering important issues, and cost is especially important, but I hope that my points will reassure the hon. Member for Hendon.

Stephen Pound: My natural instinct is obviously to support my hon. Friend the Member for Hendon (Mr. Dismore). However, reading new clause 9, as compared with the elegant phraseology originally propounded by the hon. Member for Sevenoaks (Mr. Fallon), I am rather more inclined to support his view than that of my hon. Friend. As the hon. Gentleman mentioned, the list in new clause 9 is not entirely inclusive and might be counter-productive. He mentioned some organisations that could be added to the list—personally, I would like to see tenants associations as well as residents associations. There are also no references to health authorities, primary care trusts or any other health provider. However, an essential component of the Bill and everything that we are discussing is the health of the tenant, the resident, the country and the world.
	It is crucial that we consider the wider issues, particularly as, after a week of balmy, sunny weather, the weather forecasts predict a weekend of hail, gales, storms and tempests. Our world is clearly changing rapidly; therefore, we need to make progress. The hon. Gentleman rightly reminded us of the requirement for all homes to be zero carbon by 2016. It is important to realise that we are in a process. What we need to discuss is what best aids us in that process.
	I have an instinctive antipathy towards ever-widening processes of consultation. In my many years of experience as a councillor, I found that people always pray in aid consultation when they do not get the result that they want. It is always said that consultation did not spread widely enough, but that usually just means that someone's view did not prevail. The existing legislation on statutory consultation is tried and tested. We already have a process. For instance, the consultation process for Captain Morgan's, a pub that has just opened in my constituency—it is not named after Simon Morgan, the former captain of Fulham, but is the generic name for a group of pubs—involved a wide variety of stakeholders and local residents. However, people who did not want the pub to open still said that they wanted wider consultation. The difficulty with new clause 9 is that if it becomes a statutory requirement that
	"a local planning authority shall consult",
	that will provide a green light for people who wish to expand the process ever more widely.
	As the hon. Gentleman said, the problem is that we have an eight-year time frame. We are already in the process and we need to move forward. I deeply regret to say that were new clause 9 to become part of the Bill, it would slow the entire process down. That is not to say that we need to parachute in new building systems or create new methods of house construction. However, we need to accept that there is an urgency on the one hand and a need for sustainability and energy efficiency on the other. It is not impossible for us to marry those two. The new clause is widely drawn, including house builders in one category—an enormous range of people could see themselves as coming under than umbrella—but, equally, excluding other people, as the hon. Gentleman mentioned.
	The test of utility that should always be applied when considering a new clause—I do not remotely intend to recast "Erskine May" or to influence you, Mr. Deputy Speaker—is whether it adds to the substance of the Bill. Does the new clause make it a better, more workable or more viable Bill? My concern is that if new clause 9 were accepted, it would not pass that test.

Stephen Pound: Not, of course, when my hon. Friend is speaking; he makes a very important point.
	Something that bedevils local government in its planning activities is the ever-widening process of consultation. When I read new clause 9, it reminded me immediately of when the London Eye was being built. At that time, my proud, glorious and noble borough of Ealing, which is right on the other side of London, had to be statutorily consulted because someone who stood at the top of a hill with a telescope could see the London Eye! I appreciate that many developments that we are dealing with will not be as high as that, but another good example is Ronan Point, one of the largest buildings ever constructed in London. It had a disastrous life, with a quarter of it collapsing. My main point is that the process of consultation is widening. I am not saying that energy-efficient buildings will necessarily be higher, but that the widening of consultation might completely slow the process down. It is like sand in the gearbox, slowing down the process so much.
	I understand the motivation of my hon. Friend the Member for Hendon in tabling new clause 9. In presenting the new clause, he acts as he does in all things—in the interests of his constituency and in the wider interests of the people of our city and our country. As a good and proud democrat, who has a great history in that respect, he wants to see wider involvement. What he actually wants to see—if I may try to interpret the words of the new clause—is an element of ownership in the process: a wider ownership beyond the person who builds, the authority that permits and the resident who occupies. He really wants to see wider and further involvement. That is entirely laudable, but I believe that that laudable element is already met by existing planning law, and that if the new clause were implemented, it would slow the process down. Slowing it down is not a bad thing in itself—there is no problem with that—as long as it adds substantively to the original intent behind the Bill, but I am not entirely convinced that it does.
	The points in new clause 8, however, are pertinent and important. That is particularly true of new clause 8(e), as
	"the impact on the provision of affordable housing in the local authority area"
	should and must be considered because that impact could be positive or negative. The hon. Member for Sevenoaks has gone a considerable way towards answering the concerns that many of us expressed about the cost element and whether it might prove to be a disincentive to the overarching ambition of us all to provide decent, safe and energy-efficient housing. The impact on affordable housing provision, particularly over the next few years when the statutory provision of social housing components within all new residential developments will become increasingly contentious, will be very important.
	There is much in new clause 8 that deserves to win the House's approbation, but I feel that new clause 9 would take us into a wider area without substantially adding to the overall impact of the Bill. Reluctantly, I have to say that I am more attracted by what I referred to as the original Bill's elegant, terse, sparse—the hon. Gentleman himself used the word "taut"—wording than by the wording of new clause 9. May I, through you, Mr. Deputy Speaker, assure my hon. Friend the Member for Hendon that it is nothing personal; it is simply due to the process of education and self-education that is occasionally a feature of Friday mornings in this place.

Parmjit Dhanda: I should say to my hon. Friend the Member for Hendon (Mr. Dismore) that I am instinctively attracted to new clause 3. Its principle is the promotion of microgeneration, and in my previous incarnation as an Education Minister I did all I could to get more microgeneration into our schools through the sustainable schools programme. As a consequence, we have seen real changes, which local authorities are working with: there are now better standards, and that ties in with the thinking behind new clause 3. Our schools have moved towards being BREEAM—Building Research Establishment environmental assessment method—very good, and some of them are moving towards BREEAM excellent. There are also exciting developments in terms of carbon-neutral schools, as well as solar panels and other forms of microgeneration. Our children are learning from these developments in schools, too. Therefore, this is making a difference in terms not only of energy generation, but of education. However, although I am attracted to what my hon. Friend proposes, as I shall explain, the new clause as phrased is not a good idea.
	My hon. Friend talked a great deal about microgeneration, but much less about community schemes such as those on combined heat and power and biomass, and we must remember that all of these are also important elements of the Bill of the hon. Member for Sevenoaks (Mr. Fallon). My hon. Friend also talked about the costs. I asked whether that was the cost to local authorities or to consumers, and he spoke in some detail on that point. I shall refer to it, too, because the implications in terms of housing are relevant and pertinent to the debate.
	New clause 3 would require a local planning authority to consider the desirability of increasing the extent of microgeneration in its area. New clause 7 would require local planning authorities, when setting the proportion of energy from renewable and low-carbon sources, to consider whether supplies are available locally. I asked my hon. Friend about the term "local". That was discussed in depth in Committee. For instance, the Committee debated whether "locality" referred to on-site, near-site or off-site. It is my understanding that the Committee agreed that both on-site and near-site are a part of what is termed as "locality". It is important that such progress was made in Committee, and I am grateful to its members for putting in that work and for providing such clarity.
	New clause 8 would require local planning authorities to consider the costs relating to the policies they are proposing; we had a good discussion about that. New clause 9 would require local planning authorities to consult various organisations and groups when drawing up policies—my hon. Friend the Member for Ealing, North (Stephen Pound) has just let us know his views on that.
	I understand the intention behind the new clauses. My hon. Friend the Member for Hendon wants local planning authorities, when drawing up their development plan document—the DPD—policies on such matters as local energy supply and energy efficiency, to think about local opportunities and the costs involved. He also wants them to consult those whom they should consult, and, in doing all that, to bear in mind the desirability of increasing microgeneration. These are all worthy goals, and he should be congratulated on promoting them.
	My hon. Friend will not be surprised to learn that these are just the sort of concerns that we would expect local planning authorities to consider, and I hope it reassures him to know that I believe that his proposals are not needed to make that happen. I hope that I can convince him in the coming moments that they are unnecessary. In explaining why, I shall touch on each of them briefly.
	On new clause 3, our planning policies already promote more use of both renewable and low-carbon energy. For example, our renewable energy planning policy statement requires local authorities specifically to encourage small-scale renewables through positively expressed policies in their local development documents. The climate change planning policy statement, which was published just before Christmas, has taken this further, and gives a big boost to supplying new development with local energy, including from microgeneration.

Parmjit Dhanda: I accept that, but it is not necessary to include in the Bill the things that my hon. Friend is proposing, and I shall try to explain why that is the case.
	I am unclear as to what extra would be achieved by introducing the requirement for a local authority to consider the desirability of increasing the extent of microgeneration in its area. We must put this in the context of not only the Bill, which has been discussed in Committee, but the planning policy statement to which I referred. Microgeneration technologies, such as solar panels and small wind turbines, will undoubtedly be among the range of green energy solutions used in the delivery of the policies enabled by this Bill and expected in our planning policies.
	If the argument is that we would have the provision in statute, may I remind my hon. Friend that section 3 of the Climate Change and Sustainable Energy Act 2006 already requires local authorities to have regard to the energy measures report? The report provides information on the steps that local authorities can take to increase microgeneration and other low-carbon technologies. New clause 3 is therefore unnecessary.

Parmjit Dhanda: One issue that was discussed in Committee was the fact that planning policy statements can change, but that when the Bill goes through Parliament—I am sure that it will go through Report and Third Reading in the coming hours—these matters will be on the statute book. That is fundamentally different from having only PPS guidance. That is why the Bill is important and why we have been commending the hon. Member for Sevenoaks.
	I worry that new clause 3 would create ambiguity about the Bill's intentions. It prompts one to ask why there are not other clauses requiring planning authorities to consider the desirability of community schemes that serve more than one building. Examples include combined heat and power schemes in Southampton and Woking, medium-sized wind turbines, and imaginative strategies for using a community's waste to generate heat and power for that community. Focusing on one desirable, whatever its merits—I agree that microgeneration has real merits—risks relegating other desirables. I know that that is not the intention of my hon. Friend the Member for Hendon, but as helpful as his new clause has been in stimulating debate, I think that he will agree that it is imperfect as it is currently drafted.

Andrew Dismore: We have had an interesting debate on a wide range of subjects related to these new clauses. The hon. Member for Sevenoaks (Mr. Fallon) was right when he said that this is a permissive Bill, and I would not want to take anything away from that. My main concern with the new clauses was to say that if a local authority goes down such a route, it ought to think about certain matters when it does so. My view was that it was better to put those matters in the Bill.
	I am pleased to hear that the hon. Gentleman has consulted Merton borough council and that no developer has been in difficulty with the requests that it has put forward. Of course, there is a risk that a local authority might go beyond what Merton suggests. Ultimately, it comes down to the question of price. A developer will build whatever someone wants if he is given the money to do it. One issue that has arisen is whether the developers would charge more to do the sort of things that boroughs are asking about.
	I agree that alternative technology is expensive, although the more people buy it, the cheaper it will become, as I said to my hon. Friend the Member for Ipswich (Chris Mole) in reply to his intervention. We need to encourage that to happen, and I hope that the Bill will do that.
	My main concern in this debate is the source of the value added. If we are saying that we will reinforce national policy—my hon. Friend the Minister reminded us of that—the Bill would not seem to increase the value added very much. My hon. Friend points out that we have the planning policy statement, but the point of the Bill is that it would allow local authorities to go beyond the PPS. My hon. Friend says that the PPS can change, but the point that I made earlier is that that could happen in response to a pilot scheme operated by a local authority in accordance with this Bill. So we return to the issue of where the value added can be found. To my mind, it must come from the provisions that I would wish to add to the Bill in new clause 3 in particular.
	I take the point about the wording "shall take into account" in new clause 7, but it would not water down the Bill, because it is an addition to the Bill not a removal or substitution. We do need to consider how we will emphasise the value added if we do not go beyond the national guidelines.
	On the issue of costs, my hon. Friend asked whether my concern was about the viability of the policy or the ultimate energy costs to the end user. Of course, I am concerned about both. If my hon. Friend thinks that new clause 8 is not worded sufficiently tightly, that is a fair criticism. If the Bill goes to the other place, perhaps that issue can be addressed there.
	New clause 9 is about consultation, and I take the point that my shopping list may not be as long as it should be when it comes to energy supplies. One could argue that they would come within the definition of local business, but if there is sufficient consultation within the existing framework, I would not want to try to suborn that through the new clause. However, it is important that the obligation to consult is put on the face of any legislation that will impose new obligations that would cost someone else at the end of the chain. I accept that the wording may not be appropriate, and perhaps an amendment could be tabled in the other place to impose a general duty to consult.
	I have listened to the debate and we have had a useful airing of the issues. I do not intend to press the matters to a vote and I beg to ask leave to withdraw the motion.
	 Motion and clause, by leave, withdrawn.

Andrew Dismore: I beg to move amendment No. 12, page 2, line 26, at end add—
	'(3) This Act shall come into force on such date as the Secretary of State shall appoint.'.
	This amendment is an attempt to plug a gap in the Bill, which contains no commencement provision other than the general implication that it would come into effect. If we are to give local authorities these new discretions and powers, as I hope we will, we need to allow some gearing up time so that they can get ready to exercise them. Some local authorities may be advanced in the preparation of their local plans, but it would be wrong to simply leave the matter in the air.
	It is not uncommon for Bills to have commencement clauses that give discretion to the Secretary of State to decide when they should come into force through the normal process of subordinate legislation, and that would be appropriate in this case. I have drawn new clause 12 as tightly as possible in that respect by referring to
	"such date as the Secretary of State shall appoint".
	That means that the Secretary of State must appoint a date at some stage. We have discussed such clauses before on other Bills, and there is House of Lords authority on the difference between "shall appoint" and "may appoint". I know that, because I was involved in the case that decided it before I became a Member of Parliament. If the provision included the word "may", the Bill could remain on the shelf indefinitely. However, if it says "shall", the Secretary of State will have to do something and keep the matter under active review until the Bill is brought into effect.

Stephen Pound: My hon. Friend will be as aware as me—and the whole House, I am sure—that the Easter bank holiday legislation that was passed 80 years ago has never been implemented. It could be commenced at any stage, but no Secretary of State since the 1920s has felt inclined to do so. Does he not think that it would be appropriate to fetter the discretion of the Secretary of State slightly by giving at least some indication of an implementation time in the Bill?

Andrew Dismore: It is a little while since I read the Easter Act 1928. However, if my hon. Friend were to read it, I think that he would see that the phrasing of its commencement provisions is rather different from that of amendment No. 12. The amendment would give the Secretary of State the mandatory duty of keeping the matter under review and acting to bring the Bill into effect.
	My hon. Friend the Minister has said that the Government are sympathetic to the Bill. It is important that the Secretary of State has discretion because if we are to give these powers to local authorities, they will need to be ready to use them when the Bill comes into force. There is nothing worse than the House passing legislation that is not taken up, but that could well happen if there was a flurry of publicity surrounding the Bill becoming law but everyone forgot about it because local authorities were not ready to implement it. Things would then simply fall back to the national standards to which my hon. Friend referred. We need discretion to ensure that the Bill may be brought into force in an orderly manner, given the addition discretions that local authorities will have under it.

Parmjit Dhanda: We have had an interesting debate about the purpose of the Bill, and I am pleased to reiterate our support for the Bill, as amended in Committee.
	Again, I congratulate the hon. Member for Sevenoaks (Mr. Fallon) on promoting the Bill and on taking it along the sometimes difficult path for private Members' Bills through the House; he has done very well. Earlier, he told me that he could measure his progress by the number of the officials involved in meetings. Towards the end of the process, quite a few officials were involved, and he should be pleased that the Bill has reached Third Reading today.
	Both Government and Opposition Members helped to shape the Bill in Committee, and I am particularly grateful to my hon. Friends the Members for Ipswich (Chris Mole), for Ealing, North (Stephen Pound), for Hendon (Mr. Dismore) and for Battersea (Martin Linton). Liberal Democrat Front Benchers have also contributed, albeit briefly. I also thank the hon. Member for Sevenoaks for his contributions today.
	As I have said, I am pleased that the Bill aligns itself with the approach set out in the planning policy statement on climate change. It was important for hon. Members patiently to wait for the PPS. I know that the Bill has had a difficult birth, because of the waiting before Christmas, but the PPS is there now, and we are the better for it. The publication of the new PPS on climate change was an important milestone in terms of local government's role in tackling climate change.
	It is worth spending some time reminding ourselves what the new PPS does, what difference it will make and how it dovetails with the Bill. The PPS confirms the central role of planning in helping to achieve zero-carbon homes from 2016. No one doubts the need to achieve significant carbon emission reductions from homes—I hope that no one does—which generate around one quarter of the UK's carbon emissions. The homes that we build today will be with us for 100 years or more. In the long run, it is far cheaper to build them to have low carbon emissions in the first place than it is to retrofit them in the future. That is why the Government have set a progressive timetable towards zero-carbon homes by 2016, which, as hon. Members have said, is just eight years from now.
	I want to remind the House about the scale of that ambition. That unprecedented target is unmatched anywhere in the world, and we have set it in the context of our equally ambitious plans for house building— 3 million new homes by 2020. I want to remind hon. Members about some of the steps that we are taking to drive forward that policy. I have mentioned the steps that we will take to enshrine the standards in the building regulations, and we will consult early in the new year on the first of those steps.
	The changes to the building regulations are scheduled for 2010. We are working with the industry on the detailed changes to the assessment methodology that underpins those regulations. We announced in the Budget that in order to give the industry the certainty that it requires to prepare for delivering the ambition, the Government will set out the definition of zero carbon for the purpose of the 2016 ambition by the end of this year, after consultation, which will take place this summer. An important aspect of that will be the contribution made by renewable energy.
	In the Budget, we also undertook to provide pump-priming funding for a new 2016 delivery unit to guide, monitor and co-ordinate the zero-carbon programme. We are discussing the final details with the industry and other key stakeholders. As of this month, we have introduced a mandatory rating for new homes in respect of the code for sustainable homes. The first of those homes are starting to be rated against the higher levels of that code.
	From April, we are introducing energy performance certificates for new homes. We have similar ambitions for new non-domestic buildings; the Budget announced our ambition for all new non-domestic buildings to be zero-carbon from 2019. This year, the Government will consult on the time line for and feasibility of that ambition, and they will review progress in 2013. Achieving the goal will establish Britain among the world leaders in the field and make a significant contribution towards mitigating climate change by saving approximately 75 million tonnes of CO2 in the next 30 years.
	The Government are taking action to reduce the CO2 impact of public sector buildings; I mentioned the example of schools. It is already the Government's ambition that all new schools should be zero-carbon from 2016. A task force is being set up to advise on how to achieve zero-carbon schools, on whether the time scale is realistic and on how to reduce carbon emissions in the intervening period.
	We have also moved a long way on the Building Research Establishment environmental assessment method, or BREEAM, requirements. As I said, many schools are getting "very good"; many are moving ahead to "excellent" BREEAM status as well. The Budget also announced an ambition for all new public sector buildings to be zero-carbon from 2018. Key barriers will have to be overcome in the coming months and years to deliver on that. There may be areas in respect of which achieving zero carbon presents particular and nuanced challenges. The Government will therefore establish a task force to advise on the time line, on how to reduce carbon emissions in the intervening period and on the particular challenges faced in places such as hospitals, prisons and our defence establishments.
	The planning policy statement will help speed up the shift to renewable and low-carbon energy by challenging councils to do much more to support the delivery of local renewable or low-carbon energy, including through setting percentages of energy for new development to be generated from local renewables or low-carbon sources such as microgeneration or community schemes. It also expects councils to think about the potential for local low-carbon energy generation and about cutting carbon emissions when identifying the best sites for development.
	That is in the context of the challenges of the renewable energy targets proposed under the European Union renewable energy proposals. The European Commission has published a draft directive that provides the framework for achieving the EU's agreed target of securing 20 per cent. of all its energy from renewable sources by 2020. In particular, it proposes contributions from the UK and other member states towards that goal. As part of the target on 20 per cent. renewable energy, each member state is required to achieve a 10 per cent. share of renewable energy in road transport fuels as long as sustainability conditions can be met. The Government welcome the Commission's proposals as a good starting point for discussion in the Council. The Commission has proposed that 15 per cent. of all the UK's energy, covering the electricity, heat and transport sectors, should come from renewables by 2020.

Andrew Dismore: My hon. Friend is coming to the meat of the Bill. In what ways does he think that it will help us to meet those European targets? It is important that we are clear about its value added and that it does not sit on the shelf.

Parmjit Dhanda: Absolutely. Probably the most pertinent comment with regard to the Bill's linkage with this was made by the hon. Member for Sevenoaks when he talked about local authorities having the flexibility to go further and faster and to do more, learning from the experiences of Merton and others.
	It is important to set out the framework, the targets and the contexts. We are already putting in place measures to increase renewable energy supplies, which I hope will support and help local authorities as they deliver targets and work to the opportunities that are available to them through the Bill. Further measures will be necessary—there are no two ways about that—so the Government plan a consultation in the summer on the options for meeting our share of the EU 2020 renewable energy target. We will publish our renewable energy strategy in the spring of next year once the EU directive is passed and the UK's contribution is decided. In evaluating these contributions, we need to consider the role of every individual local authority. That is why the Bill is so important.

Parmjit Dhanda: My hon. Friend is absolutely right. Perhaps not everybody in the Chamber at the moment is a Europhile, but there are a great number of things that we can learn about recycling, how we use our energy and energy efficiency. Stakeholders such as the one that he mentioned are getting out there and learning the lessons in Brussels and elsewhere across the European Union.
	My third point about the linkage with the PPS concerns the stimulus to action by local authorities. As we have learned in the course of the debate, local government has a vital role in ensuring that local communities and infrastructure are able to cope with the impact of climate change—not only the effects that are felt today but those that can be anticipated in future. The PPS, therefore, reflects the central role of planning in shaping places that are resilient to climate change and habitats that sustain biodiversity.
	Planning is not the only area where local authorities can play a key role in that agenda. Many local authorities are taking innovative action to tackle climate change already, which is what the Bill hopes to explore and support. Local authorities have demonstrated their commitment through initiatives, such as signing up to the Nottingham declaration, and through saying that they want to include climate change indicators in their local area agreements. The climate change PPS sets out how we expect planning to help us to prepare for low-carbon living. New jobs, homes and infrastructure need to be planned in ways that cut carbon emissions. Planning has to help places to adjust to expected changes in our climate.
	Planning's big contribution is what it does best—shaping new development and places. How much development, what sort of development and where are all factors that will be considered with more focus in the context of the Bill. Planning helps to get infrastructure in place in the first place, including the energy required to feed such developments. Planning has a big role in helping to deliver our world-leading standard on zero carbon, and planning the right development for the right location, alongside more sustainable transport, means that we will not need to travel as much, and when we do, less carbon will be emitted.
	Tackling climate change is firmly at the centre of what is expected of good planning. The PPS supplement, PPS1, in which we set out what we want from planning is backed in our Planning Bill with a new duty on local planners to take action on climate change. That will not just be a bolt-on, but a key, integrating theme in plans for planning decisions. Planning can support our ambition for low-carbon lifestyles through direct influence on energy use and emissions; by bringing together and encouraging action by others, we want to capture local enthusiasm, and give planners and local communities opportunities to take action at a local level. We expect planning strategies to be tested on their carbon ambition, which means securing the fullest possible use of sustainable transport and making the most of existing and planned opportunities for local energy.
	Planning is a key partner in the promotion of technological innovation and in supporting our national framework to cut carbon emissions from new buildings. Where there are local opportunities to accelerate our national timetable, the PPS says that councils can plan for that. That chimes with the Bill, which would allow local authorities to go at their own pace. Those that want to go more quickly should be encouraged to do so. Local renewable and low-carbon energy is given a big role in the PPS because emissions are generated from heat and electricity use, which means that we need to exploit local energy, rather than offsetting carbon emissions by providing low-carbon energy elsewhere or by planting trees. That is why the PPS requires councils to have a policy setting a percentage of local energy to be used in new development.
	I shall bring my remarks to a close to allow other Members to have their say, but I hope that we have got across to the House the importance of the Bill, and of how it can, within the framework of Government policies, including the PPS, make a real difference to communities. It will provide local authorities with the ammunition they want to develop in a more sustainable way for the future, and to make a real difference in tackling climate change.

Richard Benyon: I am happy to support that tribute.
	I am grateful for the chance to speak on behalf of the official Opposition in support of the Bill. The backdrop is the work of the intergovernmental panel on climate change and that of such eminent people as Lord Stern. We must act at all levels of government and play our part. In this Parliament, the Climate Change Bill will be an important part of that process, and the Bill that we are considering will allow local government to play its part.
	As a sponsor of the Sustainable Communities Bill, which my hon. Friend the Member for Ruislip-Northwood (Mr. Hurd) promoted, I firmly nailed my colours to the localist mast. In Committee, it was interesting to watch the Government tentatively probing localist ideas, which some Labour as well as Conservative and Liberal Democrat Members proposed. It is good that there is joint working on that agenda. I hope that that welcome development continues.
	When, in 2003, Merton council took the bold step of setting a 10 per cent. target for on-site renewable generation, it helped spark unprecedented investment in the microgeneration sector. Investors believed that frameworks such as that in Merton could provide a long-term marketplace for the developers and manufacturers of small scale, low-carbon technologies.
	On the path towards the zero-carbon homes target in 2016, which so many hon. Members, including the Minister, mentioned, there are stepped increases in minimum standards for public housing sector projects. In 2013, the standards jump to a 44 per cent. efficiency improvement on today's standards—or level 4 in the code for sustainable homes.
	There is genuine anxiety in the microgeneration sector, voiced by industry groups such as the Micropower Council, that that large increase will result in hugely increased demand for microgeneration. Previous minimum standards could be met through energy efficiency measures alone, whereas the microgeneration sector believes that the 44 per cent. target will demand on-site renewables in almost all cases. It argues that, at its current level, it could not supply that demand, and that that failure could seriously upset the 2016 zero-carbon homes target.
	Merton rules provide longer-term security for investment in the microgeneration sector, and will allow it to match demand as standards are ratcheted up. By enshrining councils' rights to set progressive targets, the Bill will enable councils that believe their areas to be appropriate, and with a mind to be ambitious and engage with lowering their carbon pollution, to raise the ceiling on standards for new buildings.
	It is important that, while building standards improve the performance of under-achieving councils, those with the vision to perceive the benefits and leadership of moving ahead of the pack have a mechanism whereby they can drive progress. Some authorities may allow developers to account for some of their targets through efficiency measures and others may set independent targets for microgen and efficiency. The rule—and therefore the Bill—also gives a welcome chance to smaller, local property developers to serve local markets that larger developers, with more unwieldy mass-produced product to adapt, might not tap into as easily.
	If we are really serious about tackling climate change, every aspect of government must be prepared for dynamic change and to challenge the status quo. We must foster excellence, innovation and new technology, and invest in and develop burgeoning green technologies. We must look ahead and be ambitious in deployment.
	Rather than having technological winners picked centrally or dictated by Whitehall planning guidance, which is uncertain in the long term and unsuitably broad-brush for the needs of localism, the new rules allow those communities that are most able and willing—often where land values are higher—to blaze a trail for others to follow. The rules allow the right solutions to reach the endlessly varied regions of our country and give us at least a fighting chance of reaching our 2016 zero-carbon homes target.
	I do not intend to go into the details of the many issues that the hon. Member for Hendon (Mr. Dismore) raised, which have been given more than enough coverage. I therefore conclude by again paying tribute to my hon. Friend the Member for Sevenoaks for his hard work and success thus far. Empowering local people to find local solutions is at the heart of my party's message. It gives me great pleasure to recommend to the House a Bill that has that belief at its core, while addressing an agenda that has a global scale and a profound significance.

Andrew Dismore: I congratulate the hon. Member for Sevenoaks (Mr. Fallon) on achieving, I believe, the Third Reading of his Bill today; we have about half an hour to go, but I think he will comfortably achieve his target. To get a private Member's Bill through this House is a remarkable achievement, and very few Members succeed in it. He should be congratulated not only on his success in delivering his Bill through the House today, but on the good-humoured way in which he has set about his work. He has listened to what people have said to him, he has been prepared to amend the Bill to reflect the views expressed, particularly by the Government, and as a result he has produced a Bill that is worthy of support and that should be able to progress further today.
	When the hon. Gentleman introduced the Bill on Second Reading, he said:
	"This is not a big Bill, but it does one important thing: it will enshrine in law, I hope, the so-called Merton rule".—[ Official Report, 25 January 2008; Vol. 470, c. 1733.]
	The Merton rule is that 10 per cent. of the new energy required for a development must come from renewable or low-carbon sources on or near that development. I am not sure that the hon. Gentleman has quite been able to achieve the objective of enshrining that rule in law, because the 10 per cent. figure is not there, but I actually think he has achieved something more useful. The problem with the Merton rule is that it is potentially inflexible for local authorities that might have difficulties with it. How he has proceeded may be akin to going at the pace of the slowest ship in the convoy, but it means that there will be progress across the piece, because most local authorities will take on board his proposals.
	The hon. Member for Falmouth and Camborne (Julia Goldsworthy) has identified one of the key problems both with the Bill and also more generally: the lack of impact on existing housing stock. We debated that today in relation to some of my new clauses—particularly in response to interventions from my hon. Friend the Member for Battersea (Martin Linton), who raised the point. It will be very difficult to interpret the Bill as it now stands as giving local authorities powers to intervene in relation to existing developments. The extent of that problem becomes clear when we consider the figures I mentioned earlier, such as that a low percentage of houses in the country comply with the insulation requirements, never mind some of the other desirable factors that lead to a reduction in energy consumption.
	That is a lacuna in the Bill, but it is not the hon. Gentleman's fault. It would be very difficult to devise a Bill that dealt with existing properties and would not be draconian to the householders concerned and potentially leave them facing enormous bills. As my hon. Friend the Member for Ipswich (Chris Mole) said, however, if we start with new-build we can begin to get economies of scale—through modern prefabrication methods and better use of technology, for example—and start to make some real progress towards achieving these targets. It is important that we do not forget the older properties; we will have to find a way of dealing with them, but that will have to be a Bill for another day, if anyone can devise one that will achieve that.
	We need to look at the reasons why the hon. Gentleman introduced the Bill, and why the House should approve it today. The UK has to satisfy two sets of renewables targets, both of which will be extremely challenging. The first is our own domestic target of 10 per cent. of electricity generation to be met from renewable sources by 2010, and an aspiration of 20 per cent. by 2020. The second, as the Minister mentioned, is the EU's binding target, to which the previous Prime Minister signed up at the spring European Council meeting of March 2007, that 20 per cent. of the overall European energy mix be generated from renewables by 2020.
	The EU's target, which encompasses all forms of energy, will clearly be much more difficult to meet than the UK's simple electricity target. Electricity accounted for only 18.5 per cent. of the energy used in the UK in 2006, the latest year for which figures are available. Nuclear power—the elephant in the room when anyone talks about energy policy—as a low-carbon source, is to count towards the EU target, and there is to be some burden sharing, but there is no doubt that the proposal will be very difficult to achieve.
	As has also been mentioned, this is not the first attempt to introduce a Bill along these lines; my hon. Friend the Member for Gower (Mr. Caton) attempted to do so previously. An Opposition Member has been able to get further than one of my hon. Friends in achieving the same objective, which might be a reflection of how the different Bills were phrased, but it might also reflect the growing awareness in the House about the importance of taking action to deal with the serious problem that this Bill seeks to address. As time goes by, we are becoming increasingly aware of the problems of climate change—the latest figures show that CO2 emissions have risen consistently over the past four years—and energy efficiency, as promulgated by the Bill, is the simplest and most cost-effective way to reduce carbon emissions.
	As we have heard, the planning system does not make sufficient provision for energy efficiency. The Liberal Democrats have told us about the problems that Cambridge city council has faced. It was required to water down its planning policy, which required large developers to
	"provide evidence of how they have minimized energy consumption, maximized energy efficiency and considered the feasibility of using CHP systems".
	The Government inspector said that the policy was
	"unreasonable to the extent that it imposes more onerous requirements than the Building Regulations".
	What happened in Cambridge—the man from Bristol interfering in the way that he did—brings into sharp focus the essential nature of the Bill, because it will entirely plug that gap in the law, assuming that the requirements that a local authority intends to impose are reasonable; we do not want unreasonable requirements to be imposed. That is why when we started on the trail of this Bill to talk about percentages and the original Merton rule, we could have created problems, because imposing particular fixed percentages could have created difficulties for some local authorities, although not for others.
	The Department for Communities and Local Government has launched two consultations on the planning issues. The first is on the proposed planning policy statement on planning and climate change, and the second is on the Government's plans for moving towards zero carbon development by 2016. Both are underpinned by the new voluntary code for sustainable homes, on whose progress the Minister brought us a little more up to date.
	We must ask how the Bill will change the current position; any assessment of the Bill must be based on that question. In responding to my second group of proposals, the Minister would have been aware that I had pushed him very hard on this matter, because there is no point in the House passing legislation if it will not achieve anything or if no value-added flows from it. One of my main concerns about how he replied to the debate was his saying, "Well we have these national standards." He seemed to be slightly blinkered in not reflecting on what the Bill will do, which is move beyond those national standards. Ultimately, the Planning Inspectorate, which is answerable to the Minister's boss, the Secretary of State, will also have to reflect on that and on what it will mean. It will mean being prepared to go beyond the national standards. They may well be the safety net and the bottom rung of the ladder—the Minister expanded on those very effectively—but we must go beyond them.
	Showing how the Bill will change the current position might not be as easy as it seems. As we have heard today, the Government have introduced policies to encourage on-site energy generation, renewables and energy conservation. In particular, the 2004 planning policy statement on renewable energy and the 2007 planning policy statement on climate change include guidance for local authorities that encourages such action, including on-site generation.
	The Bill will provide a statutory basis for including targets in local development frameworks and development plans, but will not specify particular targets. Local authorities will therefore have to think hard and fast about how to do that. Local planning authority policies on environmental standards for new homes vary in their scope, specific requirements and degree of prescription, but there is also variation in how and when local planning authorities seek to apply such policies. Some have identified policies on environmental standards in their adopted development plans, or have proposed them in their draft plans.
	Changes to the planning system will mean that all councils will be expected to provide for on-site renewable energy and local community energy schemes to help to cut carbon emissions in new developments. The planning rules will mean that councils and developers should consider using items such as solar panels, wind turbines and heat pumps that can generate energy from a site of new development. The word "locality" has caused some difficulty in that regard. The plans that will come through the system will build on the Merton rule, but will not be as prescriptive.
	Moving towards a low-carbon economy is a huge challenge that requires a revolution in the way in which we design, heat and power our buildings, as well as a concerted effort from a huge number of organisations, including local authorities, developers, environmental groups and local communities. A simple analysis of the existing position regarding our homes shows the scale of the challenge. The percentage of homes with cavity wall insulation has increased from 20 per cent. of our housing stock in 1996 to 36 per cent. now, but a further 8.5 million homes could benefit from it. That would save a significant amount of energy each year—and it is not an expensive thing to do. That brings us back to our debate about the educational function of the Bill. Its aim has to be encourage local authorities to require more local renewable energy generation and systems such as combined heat and power in new developments.
	The Bill provides a mechanism by which local authorities may be allowed to go further and faster than central Government, which will always be the lumbering supertanker coming up behind—if one can use the analogy of an oil tanker in a debate on renewable energy. The Bill gives local authorities the opportunity to forge ahead, speedboat style, and pilot the supertanker by developing new policies that could, if they work, be adopted by the Government as central policies. My hon. Friend the Member for Ealing, North (Stephen Pound)—a former matelot—is squinting at my nautical analogies. I am probably getting a bit carried away with mixed metaphors.

Nigel Evans: While the hon. Gentleman is using naval analogies, if he is talking about the Government, would not the Titanic be rather a better one?

Andrew Dismore: It is at the moment; one never can tell with flood risk, as we saw on that TV programme the other day. I should also point out that we have the Welsh Harp reservoir in my constituency, and I did grow up by the seaside. Perhaps that is why I am stuck in this nautical phase.
	It is important to reflect on the fact that local authorities are major commissioners of building, as is central Government, and it is important is that local authorities, when setting these new rules, should reflect on the fact that they will have to comply with them. That could be seen as both a carrot and stick, in the sense that having to comply with them might involve imposing onerous obligations on a local authority. At the same time, however, they will enable local authorities to set a good example to developers, whether of school buildings, office blocks or other projects. Similarly, central Government will have to reflect on the fact that when they apply for planning consent for central Government buildings such as prisons, which were mentioned earlier, they will have to comply with the higher standards imposed by the local authority, which will go beyond the national requirements.
	An important feature of the Bill is the fact that it refers to "reasonable requirements". As a lawyer, when I see the word "reasonable", I always wonder where on earth the argument will end up. Inevitably, litigation will be brought by developers who are not very keen on a local authority imposing the new rules, to decide what the word means. However, I believe that "reasonable" is a common-sense word in this context. It is far better than the percentages that we saw before.
	When the Bill goes to another place, we must hope that the meaning of the word "locality" will be scrutinised in a little more detail. It is vague and imprecise, and it will be a recipe for difficulty in interpreting the Bill. We fenced around this issue in our earlier debates, and I understand the problem that the hon. Gentleman had when he phrased the Bill. Reference to a local authority area could be over-prescriptive for developments on the boundaries. Perhaps the Bill intends to deal with an area that is more narrow than a local authority boundary—a local estate, for example, or a new development that might contain only a few dozen houses. So I hope that we can come up with some better wording in due course.

Stephen Pound: At the risk of offering another word of such imprecision as to make lawyers salivate and their bank managers grin, I should like to point out that the Government negotiated with the hon. Member for Sevenoaks, and in regard to the expression "in the locality", it is made clear that it refers to near-site and on-site renewable and low-carbon energy sources. I think that that is explicit within the Bill.

Andrew Dismore: Indeed.
	The real problem is that the Minister might think that he knows what "locality" means, just as my hon. Friend the Member for Ealing, North and I think that we know what it means, but we might all have a slightly different idea. The real problem is that, if the language is imprecise, the lawyers will inevitably get hold of it and argue about it to the n(th) degree in the courts. That is one of the problems associated with my former profession.
	I was very pleased that when the hon. Gentleman and I discussed my amendments he assured me that all the things that I advocated would be included under the wording of the Bill. He will recall that the first group of amendments that we discussed concerned insulation, and he reassured me that insulation would be brought within the requirements of clause 1(1)(c), which covers the question of energy efficiency standards. That squares an important circle, because when we are considering energy policy the driving force has to be to do what we can to reduce consumption in the first place.
	The hon. Gentleman was also able to reassure me that microgeneration, which is not specifically referred to in the Bill, will be brought in. He took me to task as he thought my wording was a little too lax in that respect. I am happy to concede that point.
	We had a problem with what local supplies meant in this context. It seemed to me from looking at the available research materials that the difficulty was identifying what local supplies might be when considering energy generated in the locality of a development. If we are talking about microgeneration, that is not a problem. I suppose we are talking about energy generated in one place being transferred to a nearby site. I was pleased that the hon. Gentleman was able to reassure me about the impact on housing policy. If the net result is that we end up with fewer houses for people in desperate need, that will mean that we will have thrown the baby out with the bathwater.
	I was also pleased that the Minister was able to reassure me on the question of consultation. When one is going to produce a policy that is likely to have such a wide impact as we all hope that this policy will, it is important that those who are affected by it are consulted. I am pleased that that has been brought into the Bill through the cross-references to various national policies.

Andrew Dismore: I am not, Mr. Deputy Speaker, because I was about to draw my remarks to a close. I suspect that the hon. Gentleman wants to get on to his Bill. I suspect that he will block himself if he starts to intervene on me or on anyone else who wants to contribute to the debate.
	I was simply going to say that I was pleased that my hon. Friend the Minister emphasised the importance of what the Government are doing centrally in parallel with the Bill, including the change the building regulations in 2010 and the definition of zero-carbon for new homes that will come into force in 2018. I was pleased, too, with what he had to say about renewable energy.
	A trite phrase used when we consider environmental matters is that we should think global and act local. The hon. Member for Sevenoaks has achieved that in the way in which he has introduced the Bill. The Bill has a global thought behind it and provides for the local action that is necessary to achieve that objective.

Stephen Pound: Normally, when the House speaks with a single voice there is reason for the nation to tremble. When right hon. and hon. Members refer to an interesting, wide-ranging and comprehensive debate, they usually mean precisely the opposite. However, the rare occasions when the House unites in the praise of an individual Member for promoting a Bill are so unusual that that praise is almost always utterly sincere. On this occasion, the sincerity evident in the tributes paid to the hon. Member for Sevenoaks (Mr. Fallon) speaks for itself.
	The hon. Gentleman is to be congratulated on the way in which he has promoted the Bill. He has not used some of the more flashy and apocalyptic images. He has been more of a Barrington than a Dexter, more of a Gooch than a Gower and more of an Erik Nevland than a Diomansy Kamara. His taut, sparse, precise, elegant Bill has been all the better for that.
	This is the right Bill at the right time. It chimes well with the planning policy statement on climate change, and it comes at a time when there is not only increasing concern about the global consequences of warming and climate change but an unprecedented period of house building—we need only look at the new developments in the Thames Gateway. The Bill will put a strong lock that cannot be ignored on all developments in the future.
	The issue of cost has been mentioned, and everybody knows the principle of BATNEEC—best available technology not entailing extra costs. In this case, the costs are so huge that they are beyond the mere monetary, and people are beginning to accept the reality of that. Some of the new developments in the Thames Gateway, and some of the work that was done by Taylor Woodrow around what used to be called the millennium dome and is now called the O2 something or other, have used renewable sources, from the bricks to the structure to the entire energy package. That was emerging technology, and the Bill will give us a statutory—

Vincent Cable: Care home charges could represent a vast subject. I do not want to abuse the form of Adjournment debates by getting into the whole area of the funding of social care, so I will focus on a narrow issue that has been drawn to my attention through constituency work: the specific question of cross-subsidy in relation to care home charging, and the related problem of third party top-ups.
	The issue emerged locally when it transpired, given that I think that most people were not aware of it, that the council, under two administrations—this is not a party political issue—had a 25-year agreement with Care UK, which is one of the major providers. The deal was probably very good from the council's point of view, but built into it was substantial price discrimination between two groups of residents. It emerged that self-funders were paying roughly £230 a week more than council-nominated residents. To be precise, those groups' charges were £820 a week and £585 a week. The self-funders were thus making a transfer of approximately £12,000 to the other group of residents.
	As I shall point out, there might be an element of rough justice in some of the redistribution, but for the most part, it involves transferring money from people who are quite poor to others who might or might not be quite poor. When Tracey Blackwood came to see me, she pointed out that her mother, who was a self-funder and was thus required to make the transfer, had no more income than her basic state pension, yet she was required to make large transfers on the grounds that she had a relatively small asset in the form of a modest house.
	The problem is not new. The first trace of it that I can find in House of Commons records is from a speech made in 1992 by Lord Rooker when he was an Opposition spokesman. He said:
	"The difficulty of the shortfall led to what I consider an immoral two-tier charging system in some care...home establishments. Residents with assets—usually the proceeds of the former family home—who can therefore fund themselves for a few years until their assets run out are charged between £40 and £90 a week more than other residents so that the proprietors can balance the books. That is immoral, but Ministers never refer to that cross-subsidy. Ministers cannot stay silent about the problem much longer."—[ Official Report, 4 June 1992; Vol. 208, c. 963.]
	Ministers have undoubtedly considered the problem, but it still exists in very much the same form, although the amount of cross-subsidy is now much larger.
	The problem concerns not only me and the care home residents and their relatives who have encountered it, but voluntary organisations and even statutory bodies. Age Concern refers to that anomaly, and the injustice involved, in its latest "The Age Agenda" report. It couples it with the fact that self-funders have the additional disadvantage of having weak legal protection. I recall holding an Adjournment debate in 2003 on alleged neglect and abuses at a care home in my constituency called Lynde House, owned by Westminster Health Care; the situation became something of a scandal. One of the points that emerged was that the self-funders, who are paying very substantial fees, have no legal protection against expulsion if they complain. According to Age Concern, self-funders suffer not only from cross-subsidy and price discrimination, but from lack of legal protection.
	The Alzheimer's Society has also drawn attention to the issue. It makes the point that of 700,000 Alzheimer's victims, 245,000 are in care homes. It says that many of those people—who, almost by definition, have very little understanding of the price regime in operation—are, through their families, paying substantially more than what the Joseph Rowntree Foundation calls the "fair price".
	The Care Standards Commission, the relevant statutory body, did a study last October, in which it pointed out that a survey of 10 councils showed that 22 of 38 residential homes operated a system of discriminatory pricing. The Wanless report on social care, published under the auspices of the King's Fund, calculated that the average cross-subsidy was £133 to £219 a week. The figures that I used are rather higher, but are of the same order of magnitude. The Office of Fair Trading, which answered a super-complaint on wider issues to do with care homes, found in a survey that 20 per cent. of homes had differential pricing and cross-subsidy, and 33 per cent. had third party top-ups—a similar kind of arrangement, with payments that may or may not be additional.
	The OFT study showed the magnitude of the problem that I am describing. In 2005, there were roughly 410,000 older people in residential homes. Of those, 250,000 had council-supported places, and of those 150,000 were in independent residential care homes. Therefore there are roughly 150,000 council-supported residents in independent care homes; roughly the same number are self-funded. Half of that 300,000 population effectively cross-subsidises the other half.
	The questions are: why has that happened, why does it matter, and what can be done? On why it has happened, I do not think that it is helpful to get involved in blaming people. What has happened is not the fault of care home owners, local authorities or the Government. We are dealing with a series of unintended consequences of policies that were often introduced for very good reason. However, in the independent care home sector, costs have escalated, partly because of the Care Standards Act 2000, a well-intentioned piece of legislation aimed at raising standards. Minimum wage legislation has pushed up costs, again for good reason. Local authorities have found their funding streams severely curbed, partly because they want to keep down council tax and partly because Government assessments give them more stars if they keep down costs, so local authorities are under pressure, too.
	So what do care home owners do? They have a restricted range of options. They can cut costs and undermine quality, which is not satisfactory. They can do what growing numbers of them are doing, which is to exclude state-funded residents. As a result, there is a danger of a two-tier system emerging. They can resort to what are called third party top-ups. Top-ups are perfectly reasonable in principle. If someone wants provision to be made for a pet, or wants a room overlooking the sea or mountains, it is reasonable to ask them to pay a bit more, but top-ups have in practice simply become a mechanism for charging people who are desperate to get a place in a home, and have no connection to quality. Alternatively, care homes can introduce cross-subsidy, which is the phenomenon that I am describing.
	Often, there are four types of room in care homes. Residents have identical service and quality, but some rooms are taken up by self-funders, some by NHS nursing provision, some are council-funded, and some involve people paying third party top-ups. There are different prices for groups of residents who receive the same service. There is something fundamentally wrong with that. It introduces invidious charging for people who are at their most vulnerable.
	We know from our experiences with our relatives that when people are taken into a residential home, it often involves a stressful situation after they have been in hospital. There is also pressure from hospitals to get people into homes, and it is often difficult to find one. The last thing that families are in a position to do is shop around on the basis of cost differentials, of which they may not be aware.
	It is sometimes argued that discriminating against self-funders is rough justice according to the Robin Hood principle by which the wealthy cross-subsidise the less wealthy, but that is not the case in many instances. In some cases, people on very low incomes cross-subsidise people with higher incomes. It may be that the self-funders have property—it could be a modest property, such as a working-class terraced house—and the fact that they have that asset makes them self-funders. In many instances, relatively poor people are cross-subsidising people who have no assets but more income. The system is invidious.
	There is also a danger that the situation will become more and more extreme. In a home where, for example, 70 per cent. of residents are state-funded and 30 per cent. are self-funded, the 30 per cent. of self-funders will be levering up a large element of subsidy to keep the state-funded residents in place. There are also perverse incentives. People are told as part of the means-tested provision that they must not commit waste—in other words, families must not sell the family home, because that would prejudice their ability to fund care—but once they are in the home, they are required to commit waste by spending more than the cost of residential accommodation, which depletes their assets unnecessarily quickly and ultimately makes them dependent sooner.
	Many self-funders do not enjoy proper legal protection. They pay extensively, but they are in a weaker legal position than other residents. It is apparently an anomaly in the law that, if they have a major dispute with a care home owner, they cannot resort to civil law and can only use criminal law. The Commission for Social Care Inspection, which is the statutory body, will not consider individual complaints.
	What can be done? There are two possible approaches. The first involves trying to improve individual choice, where possible. The Government have addressed that argument. In September 2006, new regulations were introduced to make it a requirement that information relating to cross-subsidy and charges should be included in the user guide, but that has not proved to be satisfactory in practice. Age Concern has sent me its appraisal of the scheme, which states that
	"the regulations are vague so care homes often do not state this clearly and there are questions about how much prospective residents can choose to avoid these homes."
	The choice model that the Government have worked with has not worked well, and the question arises whether anything can be done to improve it.
	There are one or two examples of tough legal action. A local care homes association took legal action against a council that engaged in that practice, as a result of which substantial improvements were obtained and the council was required to publish the true costs of care. A more transparent regime emerged, so the question for the Minister is whether that legal precedent can be used to obtain substantially improved provision from other councils that are much less transparent.
	The second approach involves Government funding. It would be trite in the context of this Adjournment debate to say that there should be lots more Government money. The question is whether more can be done within the Government's existing funding commitments to require local authorities to do more for their self-funders through ring-fencing and guidance. For example, if the Government are funding local councils, when councils negotiate bulk contracts, which has happened in my constituency, they should be required to negotiate on behalf of their self-funders as well on behalf of council nominees.
	I want to finish with a series of questions. Does the Minister accept the scale of the problem? A Green Paper is due on some of the wider questions in the field, but will the consultation that precedes it enable us to quantify the problem and discuss ways of dealing with it? Have the Government any further proposals, beyond the September 2006 regulations—in practice, those were not very effective—to improve the position of care home residents? Finally, do they have any proposals to enhance the legal rights of self-funders, having discovered that self-funders have very little protection in law through civil action and in other cases when there has been abuse and neglect?

Ann Keen: I congratulate the hon. Member for Twickenham (Dr. Cable) on securing this debate on care home charging. Charging for care in care homes is not new; people have always had to pay for, or contribute towards, the cost of residential care. I understand his concern about the cost of a care home place for residents who fund their own care. As I make progress, I hope to be able to answer, or at least provide reassurance, that some of those questions will be considered.
	Contracting arrangements between local authorities and independent sector care homes are a matter for those involved in the contract. The Government do not set or recommend the level of fees that local authorities pay; we think it important that local authorities should be able to tailor contracts, as necessary, to specific local circumstances. However, we expect decisions made by local authorities commissioning care home places to be made on the basis of judgments about quality, best value and, importantly, the outcomes for individual residents.
	More than 90 per cent. of care home places are in private and voluntary sector care homes. It is for care homes to negotiate the fees that they charge with the person or organisation that pays the bill. Local authorities are major purchasers of care home places and are sometimes able to negotiate very competitive prices. That can sometimes lead to suspicions of cross-subsidisation. However, such rates can be achieved because, as a block purchaser of care home places, a local authority can give care home operators greater confidence about future occupancy levels. That security about business prospects allows councils and care home owners to agree lower fees than is the case when an individual contracts directly with a care home. We are, of course, talking about people and where they live. I realise that using the language of contracts and business is not necessarily how we want to discuss the issue. However, it is necessary to use such terminology to explain about cross-subsidisation in particular.
	As local authorities have greater purchasing power, some offer to help arrange placements for people who are self-funding their care, so that those individuals can also benefit from the favourable fee rates. When a local authority funds a person's residential care, the authority charges the person for that care. Regulation 20 of the National Assistance (Assessment of Resources) Regulations 1992 states that when it is being decided whether the local authority should fund residential accommodation, no resident shall be assessed as being unable to pay for his or her accommodation at the standard rate if his or her capital, calculated in accordance with regulation 21, exceeds £22,250.
	The National Assistance Act 1948 sets out a regulatory framework within which the local authority decides how much people can afford to pay. The resident's capital assets and income, including the former home, are taken into account as that assessment is made. People have the right to move into more expensive accommodation than they would have been offered by the local authority provided that a third party—usually family or friends, or, in certain circumstances, the person involved—is willing to make up the difference between the care home's fees and what the local authority would usually expect to pay.
	A local authority cannot insist that a third party should make additional payments on a resident's behalf, but if that is not done, the authority may be entitled to arrange for the resident to move to alternative accommodation. However, if a resident's needs can only be met in specific accommodation, the local authority should make up the difference between the resident's contribution and the care home fees. In those circumstances, a third party should not be expected to make a top-up payment so that the resident can continue to live there. If this route is not taken, and individuals deal with care homes themselves, the contractual arrangements are entirely a matter between the care home owner and the individual resident. The cost may be more or less than a local authority contract.
	Having known the hon. Gentleman for some years, I know that he has concerns about the transfer of assets to avoid higher charging. When carrying out a financial assessment, the local authority will decide whether the resident has deliberately deprived themselves of assets to avoid paying for care. If the asset was transferred less than six months before the resident went into the home and the local authority believes that deprivation has occurred, it can pursue the third party for the cost of the resident's care. If the transfer took place more than six months before, the local authority can still take into account the asset value when deciding how much the person should pay for their care.
	There have been suggestions that in some places higher fees paid by self-funders are being used to cross-subsidise insufficient fees paid by local authorities. We do not find that acceptable, so, as the hon. Gentleman said, we have taken steps to make fee charges by care homes more transparent. With regard to the NHS paying for nursing care, we have issued a single central model contract for the NHS to use with care homes that ensures that any NHS contribution to pay for the resident's nursing care is accounted for separately.
	In June 2006, we amended the care homes regulations to address concerns relating to price transparency, and these came into force in September 2006. The new regulations require care homes to provide clear information on terms and conditions, including fees, before a resident moves in. That helps people acting on their own behalf or families choosing care homes for relatives who may, of course, be frail or vulnerable. Department of Health officials have been working with the Commission for Social Care Inspection to support the effective implementation of the new regulations.
	The Government have provided significant investment in local services, including in the area of social care, since taking office. Total Government allocations to local authorities have increased by 39 per cent. in real terms since 1997. That should enable local authorities to contract with providers at realistic prices.
	In May 2005, the Office of Fair Trading published a report on the market for care homes for older people in the UK. We welcomed the report, which identifies some important issues where the care home market is not functioning well for older people as consumers—an issue that worries not only me but the Under-Secretary of State for Health, my hon. Friend the Member for Bury, South (Mr. Lewis), who is responsible for it as part of his portfolio. The OFT recommendations are in line with the Government's vision to support the personal dignity of older people by providing them with information and support to enable genuine choice and greater security in their living arrangements.
	Accordingly, in respect of England, the Government announced an action plan to implement their decisions. It set out Government policy for the regulation of care homes within the context of the Government's vision and aims for adult social care and wider services set out in the Green Paper, "Independence, Well-being and Choice". The White Paper, "Our health, our care, our say: a new direction for community services", published on 30 January 2006, formally adopted the vision set out in "Independence, Well-being and Choice". Work to implement the action plan is continuing.
	We believe that, taken together, these measures ensure that the rights of care home residents as consumers will be safeguarded and strengthened. The costs of care in a care home are substantial over the long term, and we are determined to ensure that residents and their families receive good-quality care and information about all aspects of that care. This is an exceptionally difficult time for the resident and their family, and it has created a lot of heartache for many people.
	In the 2007 pre-Budget report and comprehensive spending review, the Chancellor announced a Green Paper to set out options for the reform of the current care and support system. The Government are committed to a system of residential care charges that is fair to the residents of care homes, those who care for them, taxpayers and agencies, and which is sustainable. I take on board the hon. Gentleman's points, particularly those relating to Age Concern. All social care, including that for self-funders, is within the scope of the Green Paper review. The Government are open-minded about the future funding system and will consult widely with interested parties. I know that my hon. Friend the Under-Secretary is looking forward to the consultation, and I feel confident that the hon. Member for Twickenham will be part of it, using his expertise, knowledge and concern on this issue during the debate on the Green Paper.
	 Question put and agreed to.
	 Adjourned accordingly at five minutes to Three o'clock.